Correlation Between Guangdong Sanhe and Cofco Biochemical
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By analyzing existing cross correlation between Guangdong Sanhe Pile and Cofco Biochemical Anhui, you can compare the effects of market volatilities on Guangdong Sanhe and Cofco Biochemical 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 Guangdong Sanhe with a short position of Cofco Biochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Sanhe and Cofco Biochemical.
Diversification Opportunities for Guangdong Sanhe and Cofco Biochemical
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Cofco is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Sanhe Pile and Cofco Biochemical Anhui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cofco Biochemical Anhui and Guangdong Sanhe 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 Guangdong Sanhe Pile are associated (or correlated) with Cofco Biochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cofco Biochemical Anhui has no effect on the direction of Guangdong Sanhe i.e., Guangdong Sanhe and Cofco Biochemical go up and down completely randomly.
Pair Corralation between Guangdong Sanhe and Cofco Biochemical
Assuming the 90 days trading horizon Guangdong Sanhe Pile is expected to generate 2.14 times more return on investment than Cofco Biochemical. However, Guangdong Sanhe is 2.14 times more volatile than Cofco Biochemical Anhui. It trades about 0.21 of its potential returns per unit of risk. Cofco Biochemical Anhui is currently generating about 0.05 per unit of risk. If you would invest 645.00 in Guangdong Sanhe Pile on September 13, 2024 and sell it today you would earn a total of 90.00 from holding Guangdong Sanhe Pile or generate 13.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Guangdong Sanhe Pile vs. Cofco Biochemical Anhui
Performance |
| Timeline |
| Guangdong Sanhe Pile |
| Cofco Biochemical Anhui |
Guangdong Sanhe and Cofco Biochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Sanhe and Cofco Biochemical
The main advantage of trading using opposite Guangdong Sanhe and Cofco Biochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Sanhe position performs unexpectedly, Cofco Biochemical 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 Cofco Biochemical will offset losses from the drop in Cofco Biochemical's long position.| Guangdong Sanhe vs. Zijin Mining Group | Guangdong Sanhe vs. Wanhua Chemical Group | Guangdong Sanhe vs. Baoshan Iron Steel | Guangdong Sanhe vs. Shandong Gold Mining |
| Cofco Biochemical vs. Zijin Mining Group | Cofco Biochemical vs. Wanhua Chemical Group | Cofco Biochemical vs. Baoshan Iron Steel | Cofco Biochemical vs. Shandong Gold Mining |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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