Correlation Between Gifore Agricultural and Shandong Rike
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By analyzing existing cross correlation between Gifore Agricultural Machinery and Shandong Rike Chemical, you can compare the effects of market volatilities on Gifore Agricultural and Shandong Rike 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 Gifore Agricultural with a short position of Shandong Rike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gifore Agricultural and Shandong Rike.
Diversification Opportunities for Gifore Agricultural and Shandong Rike
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gifore and Shandong is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Gifore Agricultural Machinery and Shandong Rike Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Rike Chemical and Gifore Agricultural 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 Gifore Agricultural Machinery are associated (or correlated) with Shandong Rike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Rike Chemical has no effect on the direction of Gifore Agricultural i.e., Gifore Agricultural and Shandong Rike go up and down completely randomly.
Pair Corralation between Gifore Agricultural and Shandong Rike
Assuming the 90 days trading horizon Gifore Agricultural Machinery is expected to under-perform the Shandong Rike. But the stock apears to be less risky and, when comparing its historical volatility, Gifore Agricultural Machinery is 1.08 times less risky than Shandong Rike. The stock trades about -0.11 of its potential returns per unit of risk. The Shandong Rike Chemical is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 590.00 in Shandong Rike Chemical on October 29, 2024 and sell it today you would lose (25.00) from holding Shandong Rike Chemical or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gifore Agricultural Machinery vs. Shandong Rike Chemical
Performance |
| Timeline |
| Gifore Agricultural |
| Shandong Rike Chemical |
Gifore Agricultural and Shandong Rike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gifore Agricultural and Shandong Rike
The main advantage of trading using opposite Gifore Agricultural and Shandong Rike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gifore Agricultural position performs unexpectedly, Shandong Rike 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 Shandong Rike will offset losses from the drop in Shandong Rike's long position.| Gifore Agricultural vs. Agricultural Bank of | Gifore Agricultural vs. Industrial and Commercial | Gifore Agricultural vs. Bank of China | Gifore Agricultural vs. China Construction Bank |
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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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