Correlation Between Shanghai Phichem and Guangdong Qunxing
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By analyzing existing cross correlation between Shanghai Phichem Material and Guangdong Qunxing Toys, you can compare the effects of market volatilities on Shanghai Phichem and Guangdong Qunxing 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 Shanghai Phichem with a short position of Guangdong Qunxing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Phichem and Guangdong Qunxing.
Diversification Opportunities for Shanghai Phichem and Guangdong Qunxing
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shanghai and Guangdong is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Phichem Material and Guangdong Qunxing Toys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Qunxing Toys and Shanghai Phichem 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 Shanghai Phichem Material are associated (or correlated) with Guangdong Qunxing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Qunxing Toys has no effect on the direction of Shanghai Phichem i.e., Shanghai Phichem and Guangdong Qunxing go up and down completely randomly.
Pair Corralation between Shanghai Phichem and Guangdong Qunxing
Assuming the 90 days trading horizon Shanghai Phichem is expected to generate 5.32 times less return on investment than Guangdong Qunxing. But when comparing it to its historical volatility, Shanghai Phichem Material is 1.09 times less risky than Guangdong Qunxing. It trades about 0.02 of its potential returns per unit of risk. Guangdong Qunxing Toys is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 551.00 in Guangdong Qunxing Toys on October 14, 2024 and sell it today you would earn a total of 134.00 from holding Guangdong Qunxing Toys or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Phichem Material vs. Guangdong Qunxing Toys
Performance |
| Timeline |
| Shanghai Phichem Material |
| Guangdong Qunxing Toys |
Shanghai Phichem and Guangdong Qunxing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Phichem and Guangdong Qunxing
The main advantage of trading using opposite Shanghai Phichem and Guangdong Qunxing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Phichem position performs unexpectedly, Guangdong Qunxing 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 Qunxing will offset losses from the drop in Guangdong Qunxing's long position.| Shanghai Phichem vs. Tongling Nonferrous Metals | Shanghai Phichem vs. Beijing Bewinner Communications | Shanghai Phichem vs. Fiberhome Telecommunication Technologies | Shanghai Phichem vs. Hainan Airlines Co |
| Guangdong Qunxing vs. Giantec Semiconductor Corp | Guangdong Qunxing vs. Shanghai Phichem Material | Guangdong Qunxing vs. Union Semiconductor Co | Guangdong Qunxing vs. Konfoong Materials International |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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