Correlation Between Guangdong Electric and Shanghai Jin
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By analyzing existing cross correlation between Guangdong Electric Power and Shanghai Jin Jiang, you can compare the effects of market volatilities on Guangdong Electric and Shanghai Jin 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 Electric with a short position of Shanghai Jin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Electric and Shanghai Jin.
Diversification Opportunities for Guangdong Electric and Shanghai Jin
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and Shanghai is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Electric Power and Shanghai Jin Jiang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Jin Jiang and Guangdong Electric 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 Electric Power are associated (or correlated) with Shanghai Jin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Jin Jiang has no effect on the direction of Guangdong Electric i.e., Guangdong Electric and Shanghai Jin go up and down completely randomly.
Pair Corralation between Guangdong Electric and Shanghai Jin
Assuming the 90 days trading horizon Guangdong Electric Power is expected to under-perform the Shanghai Jin. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Electric Power is 1.79 times less risky than Shanghai Jin. The stock trades about -0.16 of its potential returns per unit of risk. The Shanghai Jin Jiang is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Shanghai Jin Jiang on October 14, 2024 and sell it today you would lose (4.00) from holding Shanghai Jin Jiang or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Electric Power vs. Shanghai Jin Jiang
Performance |
| Timeline |
| Guangdong Electric Power |
| Shanghai Jin Jiang |
Guangdong Electric and Shanghai Jin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Electric and Shanghai Jin
The main advantage of trading using opposite Guangdong Electric and Shanghai Jin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Electric position performs unexpectedly, Shanghai Jin 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 Shanghai Jin will offset losses from the drop in Shanghai Jin's long position.| Guangdong Electric vs. Jiugui Liquor Co | Guangdong Electric vs. Beijing Jiaman Dress | Guangdong Electric vs. Vats Liquor Chain | Guangdong Electric vs. Xiangtan Electrochemical Scientific |
| Shanghai Jin vs. State Grid InformationCommunication | Shanghai Jin vs. Songz Automobile Air | Shanghai Jin vs. Guangzhou Automobile Group | Shanghai Jin vs. CIMC Vehicles Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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