Correlation Between Guangzhou Ruoyuchen and Datang HuaYin
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By analyzing existing cross correlation between Guangzhou Ruoyuchen Information and Datang HuaYin Electric, you can compare the effects of market volatilities on Guangzhou Ruoyuchen and Datang HuaYin and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Guangzhou Ruoyuchen with a short position of Datang HuaYin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Ruoyuchen and Datang HuaYin.
Diversification Opportunities for Guangzhou Ruoyuchen and Datang HuaYin
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Datang is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Ruoyuchen Informatio and Datang HuaYin Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang HuaYin Electric and Guangzhou Ruoyuchen is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Guangzhou Ruoyuchen Information are associated (or correlated) with Datang HuaYin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang HuaYin Electric has no effect on the direction of Guangzhou Ruoyuchen i.e., Guangzhou Ruoyuchen and Datang HuaYin go up and down completely randomly.
Pair Corralation between Guangzhou Ruoyuchen and Datang HuaYin
Assuming the 90 days trading horizon Guangzhou Ruoyuchen Information is expected to generate 1.45 times more return on investment than Datang HuaYin. However, Guangzhou Ruoyuchen is 1.45 times more volatile than Datang HuaYin Electric. It trades about 0.15 of its potential returns per unit of risk. Datang HuaYin Electric is currently generating about -0.03 per unit of risk. If you would invest 1,125 in Guangzhou Ruoyuchen Information on August 28, 2024 and sell it today you would earn a total of 868.00 from holding Guangzhou Ruoyuchen Information or generate 77.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Ruoyuchen Informatio vs. Datang HuaYin Electric
Performance |
| Timeline |
| Guangzhou Ruoyuchen |
| Datang HuaYin Electric |
Guangzhou Ruoyuchen and Datang HuaYin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Ruoyuchen and Datang HuaYin
The main advantage of trading using opposite Guangzhou Ruoyuchen and Datang HuaYin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Ruoyuchen position performs unexpectedly, Datang HuaYin can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Datang HuaYin will offset losses from the drop in Datang HuaYin's long position.| Guangzhou Ruoyuchen vs. Industrial and Commercial | Guangzhou Ruoyuchen vs. Agricultural Bank of | Guangzhou Ruoyuchen vs. China Construction Bank | Guangzhou Ruoyuchen vs. Bank of China |
| Datang HuaYin vs. Industrial and Commercial | Datang HuaYin vs. China Construction Bank | Datang HuaYin vs. Agricultural Bank of | Datang HuaYin vs. Bank of China |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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