Correlation Between Guangzhou Ruoyuchen and Hainan Haiqi
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By analyzing existing cross correlation between Guangzhou Ruoyuchen Information and Hainan Haiqi Transportation, you can compare the effects of market volatilities on Guangzhou Ruoyuchen and Hainan Haiqi 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 Hainan Haiqi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Ruoyuchen and Hainan Haiqi.
Diversification Opportunities for Guangzhou Ruoyuchen and Hainan Haiqi
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangzhou and Hainan is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Ruoyuchen Informatio and Hainan Haiqi Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Haiqi Transpo 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 Hainan Haiqi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Haiqi Transpo has no effect on the direction of Guangzhou Ruoyuchen i.e., Guangzhou Ruoyuchen and Hainan Haiqi go up and down completely randomly.
Pair Corralation between Guangzhou Ruoyuchen and Hainan Haiqi
Assuming the 90 days trading horizon Guangzhou Ruoyuchen Information is expected to generate 1.75 times more return on investment than Hainan Haiqi. However, Guangzhou Ruoyuchen is 1.75 times more volatile than Hainan Haiqi Transportation. It trades about 0.14 of its potential returns per unit of risk. Hainan Haiqi Transportation is currently generating about -0.13 per unit of risk. If you would invest 2,213 in Guangzhou Ruoyuchen Information on November 7, 2024 and sell it today you would earn a total of 509.00 from holding Guangzhou Ruoyuchen Information or generate 23.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Ruoyuchen Informatio vs. Hainan Haiqi Transportation
Performance |
| Timeline |
| Guangzhou Ruoyuchen |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Hainan Haiqi Transpo |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guangzhou Ruoyuchen and Hainan Haiqi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Ruoyuchen and Hainan Haiqi
The main advantage of trading using opposite Guangzhou Ruoyuchen and Hainan Haiqi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Ruoyuchen position performs unexpectedly, Hainan Haiqi 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 Hainan Haiqi will offset losses from the drop in Hainan Haiqi's long position.The idea behind Guangzhou Ruoyuchen Information and Hainan Haiqi Transportation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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