Correlation Between Gifore Agricultural and Liaoning Dingjide
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By analyzing existing cross correlation between Gifore Agricultural Machinery and Liaoning Dingjide Petrochemical, you can compare the effects of market volatilities on Gifore Agricultural and Liaoning Dingjide 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 Liaoning Dingjide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gifore Agricultural and Liaoning Dingjide.
Diversification Opportunities for Gifore Agricultural and Liaoning Dingjide
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gifore and Liaoning is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gifore Agricultural Machinery and Liaoning Dingjide Petrochemica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Dingjide 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 Liaoning Dingjide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Dingjide has no effect on the direction of Gifore Agricultural i.e., Gifore Agricultural and Liaoning Dingjide go up and down completely randomly.
Pair Corralation between Gifore Agricultural and Liaoning Dingjide
Assuming the 90 days trading horizon Gifore Agricultural Machinery is expected to generate 1.46 times more return on investment than Liaoning Dingjide. However, Gifore Agricultural is 1.46 times more volatile than Liaoning Dingjide Petrochemical. It trades about 0.18 of its potential returns per unit of risk. Liaoning Dingjide Petrochemical is currently generating about 0.11 per unit of risk. If you would invest 488.00 in Gifore Agricultural Machinery on September 29, 2024 and sell it today you would earn a total of 71.00 from holding Gifore Agricultural Machinery or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gifore Agricultural Machinery vs. Liaoning Dingjide Petrochemica
Performance |
| Timeline |
| Gifore Agricultural |
| Liaoning Dingjide |
Gifore Agricultural and Liaoning Dingjide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gifore Agricultural and Liaoning Dingjide
The main advantage of trading using opposite Gifore Agricultural and Liaoning Dingjide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gifore Agricultural position performs unexpectedly, Liaoning Dingjide 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 Liaoning Dingjide will offset losses from the drop in Liaoning Dingjide's long position.| Gifore Agricultural vs. Sinomach Automobile Co | Gifore Agricultural vs. Uroica Mining Safety | Gifore Agricultural vs. Shanghai Yanpu Metal | Gifore Agricultural vs. Hainan Mining Co |
| Liaoning Dingjide vs. Zijin Mining Group | Liaoning Dingjide vs. Baoshan Iron Steel | Liaoning Dingjide vs. Shandong Gold Mining | Liaoning Dingjide vs. Rongsheng Petrochemical 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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