Correlation Between Guangdong Jinming and Shenwu Energy
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By analyzing existing cross correlation between Guangdong Jinming Machinery and Shenwu Energy Saving, you can compare the effects of market volatilities on Guangdong Jinming and Shenwu Energy 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 Guangdong Jinming with a short position of Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jinming and Shenwu Energy.
Diversification Opportunities for Guangdong Jinming and Shenwu Energy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Shenwu is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jinming Machinery and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving and Guangdong Jinming 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 Guangdong Jinming Machinery are associated (or correlated) with Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of Guangdong Jinming i.e., Guangdong Jinming and Shenwu Energy go up and down completely randomly.
Pair Corralation between Guangdong Jinming and Shenwu Energy
Assuming the 90 days trading horizon Guangdong Jinming Machinery is expected to generate 1.36 times more return on investment than Shenwu Energy. However, Guangdong Jinming is 1.36 times more volatile than Shenwu Energy Saving. It trades about 0.19 of its potential returns per unit of risk. Shenwu Energy Saving is currently generating about -0.08 per unit of risk. If you would invest 615.00 in Guangdong Jinming Machinery on September 4, 2024 and sell it today you would earn a total of 80.00 from holding Guangdong Jinming Machinery or generate 13.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jinming Machinery vs. Shenwu Energy Saving
Performance |
| Timeline |
| Guangdong Jinming |
| Shenwu Energy Saving |
Guangdong Jinming and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jinming and Shenwu Energy
The main advantage of trading using opposite Guangdong Jinming and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jinming position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.| Guangdong Jinming vs. Chengdu Kanghua Biological | Guangdong Jinming vs. Beijing Wantai Biological | Guangdong Jinming vs. Suzhou Novoprotein Scientific | Guangdong Jinming vs. Aluminum Corp of |
| Shenwu Energy vs. Guilin Seamild Foods | Shenwu Energy vs. HUAQIN TECHNOLOGY LTD | Shenwu Energy vs. Shanghai Ziyan Foods | Shenwu Energy vs. Linewell Software 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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