Correlation Between Aba Chemicals and Guangzhou Haige
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By analyzing existing cross correlation between Aba Chemicals Corp and Guangzhou Haige Communications, you can compare the effects of market volatilities on Aba Chemicals and Guangzhou Haige 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 Aba Chemicals with a short position of Guangzhou Haige. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Guangzhou Haige.
Diversification Opportunities for Aba Chemicals and Guangzhou Haige
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aba and Guangzhou is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Guangzhou Haige Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haige Comm and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Guangzhou Haige. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haige Comm has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Guangzhou Haige go up and down completely randomly.
Pair Corralation between Aba Chemicals and Guangzhou Haige
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Guangzhou Haige. But the stock apears to be less risky and, when comparing its historical volatility, Aba Chemicals Corp is 1.05 times less risky than Guangzhou Haige. The stock trades about -0.17 of its potential returns per unit of risk. The Guangzhou Haige Communications is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,316 in Guangzhou Haige Communications on September 13, 2024 and sell it today you would lose (40.00) from holding Guangzhou Haige Communications or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Guangzhou Haige Communications
Performance |
| Timeline |
| Aba Chemicals Corp |
| Guangzhou Haige Comm |
Aba Chemicals and Guangzhou Haige Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Guangzhou Haige
The main advantage of trading using opposite Aba Chemicals and Guangzhou Haige positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Guangzhou Haige 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 Haige will offset losses from the drop in Guangzhou Haige's long position.| Aba Chemicals vs. Changchun Faway Automobile | Aba Chemicals vs. Zhongyin Babi Food | Aba Chemicals vs. Jiangsu Financial Leasing | Aba Chemicals vs. Xiangyang Automobile Bearing |
| Guangzhou Haige vs. Industrial and Commercial | Guangzhou Haige vs. China Construction Bank | Guangzhou Haige vs. Bank of China | Guangzhou Haige vs. Agricultural Bank of |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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