Correlation Between Aba Chemicals and Guangdong Brandmax
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By analyzing existing cross correlation between Aba Chemicals Corp and Guangdong Brandmax Marketing, you can compare the effects of market volatilities on Aba Chemicals and Guangdong Brandmax 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 Guangdong Brandmax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Guangdong Brandmax.
Diversification Opportunities for Aba Chemicals and Guangdong Brandmax
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aba and Guangdong is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Guangdong Brandmax Marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Brandmax 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 Guangdong Brandmax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Brandmax has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Guangdong Brandmax go up and down completely randomly.
Pair Corralation between Aba Chemicals and Guangdong Brandmax
Assuming the 90 days trading horizon Aba Chemicals is expected to generate 1.05 times less return on investment than Guangdong Brandmax. But when comparing it to its historical volatility, Aba Chemicals Corp is 1.08 times less risky than Guangdong Brandmax. It trades about 0.03 of its potential returns per unit of risk. Guangdong Brandmax Marketing is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 925.00 in Guangdong Brandmax Marketing on September 3, 2024 and sell it today you would earn a total of 54.00 from holding Guangdong Brandmax Marketing or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Guangdong Brandmax Marketing
Performance |
| Timeline |
| Aba Chemicals Corp |
| Guangdong Brandmax |
Aba Chemicals and Guangdong Brandmax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Guangdong Brandmax
The main advantage of trading using opposite Aba Chemicals and Guangdong Brandmax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Guangdong Brandmax 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 Guangdong Brandmax will offset losses from the drop in Guangdong Brandmax's long position.| Aba Chemicals vs. StarPower Semiconductor | Aba Chemicals vs. Suzhou Weizhixiang Food | Aba Chemicals vs. Shanghai Xinhua Media | Aba Chemicals vs. Beijing Bashi Media |
| Guangdong Brandmax vs. Gansu Jiu Steel | Guangdong Brandmax vs. Ming Yang Smart | Guangdong Brandmax vs. Aba Chemicals Corp | Guangdong Brandmax vs. Loctek Ergonomic Technology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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