Correlation Between Guangdong Wens and Zhejiang Kingland
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Zhejiang Kingland Pipeline, you can compare the effects of market volatilities on Guangdong Wens and Zhejiang Kingland 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 Kingland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Zhejiang Kingland.
Diversification Opportunities for Guangdong Wens and Zhejiang Kingland
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Zhejiang is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Zhejiang Kingland Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Kingland 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 Kingland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Kingland has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Zhejiang Kingland go up and down completely randomly.
Pair Corralation between Guangdong Wens and Zhejiang Kingland
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to generate 0.9 times more return on investment than Zhejiang Kingland. However, Guangdong Wens Foodstuff is 1.11 times less risky than Zhejiang Kingland. It trades about 0.02 of its potential returns per unit of risk. Zhejiang Kingland Pipeline is currently generating about 0.01 per unit of risk. If you would invest 1,666 in Guangdong Wens Foodstuff on September 2, 2024 and sell it today you would earn a total of 68.00 from holding Guangdong Wens Foodstuff or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Zhejiang Kingland Pipeline
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Zhejiang Kingland |
Guangdong Wens and Zhejiang Kingland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Zhejiang Kingland
The main advantage of trading using opposite Guangdong Wens and Zhejiang Kingland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Zhejiang Kingland 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 Kingland will offset losses from the drop in Zhejiang Kingland's long position.| Guangdong Wens vs. Henan Shuanghui Investment | Guangdong Wens vs. Sportsoul Co Ltd | Guangdong Wens vs. Shuhua Sports Co | Guangdong Wens vs. Metro Investment Development |
| Zhejiang Kingland vs. Leyard Optoelectronic | Zhejiang Kingland vs. Fuzhou Rockchip Electronics | Zhejiang Kingland vs. Techshine Electronics Co | Zhejiang Kingland vs. Guangzhou Seagull Kitchen |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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