Correlation Between Guangdong Wens and Zhejiang Dahua
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Zhejiang Dahua Technology, you can compare the effects of market volatilities on Guangdong Wens and Zhejiang Dahua 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 Wens with a short position of Zhejiang Dahua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Zhejiang Dahua.
Diversification Opportunities for Guangdong Wens and Zhejiang Dahua
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Zhejiang is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Zhejiang Dahua Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Dahua Technology and Guangdong Wens 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 Wens Foodstuff are associated (or correlated) with Zhejiang Dahua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Dahua Technology has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Zhejiang Dahua go up and down completely randomly.
Pair Corralation between Guangdong Wens and Zhejiang Dahua
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the Zhejiang Dahua. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 1.14 times less risky than Zhejiang Dahua. The stock trades about -0.01 of its potential returns per unit of risk. The Zhejiang Dahua Technology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,790 in Zhejiang Dahua Technology on September 12, 2024 and sell it today you would lose (87.00) from holding Zhejiang Dahua Technology or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Zhejiang Dahua Technology
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Zhejiang Dahua Technology |
Guangdong Wens and Zhejiang Dahua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Zhejiang Dahua
The main advantage of trading using opposite Guangdong Wens and Zhejiang Dahua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Zhejiang Dahua 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 Zhejiang Dahua will offset losses from the drop in Zhejiang Dahua's long position.| Guangdong Wens vs. China Petroleum Chemical | Guangdong Wens vs. PetroChina Co Ltd | Guangdong Wens vs. China State Construction | Guangdong Wens vs. China Railway Group |
| Zhejiang Dahua vs. Guangdong Wens Foodstuff | Zhejiang Dahua vs. Beijing Mainstreets Investment | Zhejiang Dahua vs. Shenzhen Topway Video | Zhejiang Dahua vs. Youyou Foods 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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