Correlation Between Songcheng Performance and Guangzhou KingTeller
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By analyzing existing cross correlation between Songcheng Performance Develop and Guangzhou KingTeller Technology, you can compare the effects of market volatilities on Songcheng Performance and Guangzhou KingTeller 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 Songcheng Performance with a short position of Guangzhou KingTeller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songcheng Performance and Guangzhou KingTeller.
Diversification Opportunities for Songcheng Performance and Guangzhou KingTeller
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Songcheng and Guangzhou is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Songcheng Performance Develop and Guangzhou KingTeller Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou KingTeller and Songcheng Performance 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 Songcheng Performance Develop are associated (or correlated) with Guangzhou KingTeller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou KingTeller has no effect on the direction of Songcheng Performance i.e., Songcheng Performance and Guangzhou KingTeller go up and down completely randomly.
Pair Corralation between Songcheng Performance and Guangzhou KingTeller
Assuming the 90 days trading horizon Songcheng Performance Develop is expected to under-perform the Guangzhou KingTeller. But the stock apears to be less risky and, when comparing its historical volatility, Songcheng Performance Develop is 2.07 times less risky than Guangzhou KingTeller. The stock trades about -0.06 of its potential returns per unit of risk. The Guangzhou KingTeller Technology is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 435.00 in Guangzhou KingTeller Technology on September 3, 2024 and sell it today you would earn a total of 63.00 from holding Guangzhou KingTeller Technology or generate 14.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songcheng Performance Develop vs. Guangzhou KingTeller Technolog
Performance |
| Timeline |
| Songcheng Performance |
| Guangzhou KingTeller |
Songcheng Performance and Guangzhou KingTeller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songcheng Performance and Guangzhou KingTeller
The main advantage of trading using opposite Songcheng Performance and Guangzhou KingTeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songcheng Performance position performs unexpectedly, Guangzhou KingTeller 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 Guangzhou KingTeller will offset losses from the drop in Guangzhou KingTeller's long position.The idea behind Songcheng Performance Develop and Guangzhou KingTeller Technology 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.
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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