Correlation Between Guangzhou Hongli and Changsha Jingjia
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By analyzing existing cross correlation between Guangzhou Hongli Opto and Changsha Jingjia Microelectronics, you can compare the effects of market volatilities on Guangzhou Hongli and Changsha Jingjia 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 Guangzhou Hongli with a short position of Changsha Jingjia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Hongli and Changsha Jingjia.
Diversification Opportunities for Guangzhou Hongli and Changsha Jingjia
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and Changsha is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Hongli Opto and Changsha Jingjia Microelectron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changsha Jingjia Mic and Guangzhou Hongli 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 Guangzhou Hongli Opto are associated (or correlated) with Changsha Jingjia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changsha Jingjia Mic has no effect on the direction of Guangzhou Hongli i.e., Guangzhou Hongli and Changsha Jingjia go up and down completely randomly.
Pair Corralation between Guangzhou Hongli and Changsha Jingjia
Assuming the 90 days trading horizon Guangzhou Hongli is expected to generate 6.39 times less return on investment than Changsha Jingjia. But when comparing it to its historical volatility, Guangzhou Hongli Opto is 1.39 times less risky than Changsha Jingjia. It trades about 0.01 of its potential returns per unit of risk. Changsha Jingjia Microelectronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,045 in Changsha Jingjia Microelectronics on October 15, 2024 and sell it today you would earn a total of 2,885 from holding Changsha Jingjia Microelectronics or generate 47.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Hongli Opto vs. Changsha Jingjia Microelectron
Performance |
| Timeline |
| Guangzhou Hongli Opto |
| Changsha Jingjia Mic |
Guangzhou Hongli and Changsha Jingjia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Hongli and Changsha Jingjia
The main advantage of trading using opposite Guangzhou Hongli and Changsha Jingjia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Hongli position performs unexpectedly, Changsha Jingjia 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 Changsha Jingjia will offset losses from the drop in Changsha Jingjia's long position.| Guangzhou Hongli vs. Montage Technology Co | Guangzhou Hongli vs. HanS Laser Tech | Guangzhou Hongli vs. Sharetronic Data Technology | Guangzhou Hongli vs. CITIC Guoan Information |
| Changsha Jingjia vs. Sunwave Communications Co | Changsha Jingjia vs. Aba Chemicals Corp | Changsha Jingjia vs. Songz Automobile Air | Changsha Jingjia vs. Beijing Kingsoft Office |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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