Correlation Between Guangdong Wens and Zhejiang Construction
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Zhejiang Construction Investment, you can compare the effects of market volatilities on Guangdong Wens and Zhejiang Construction 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 Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Zhejiang Construction.
Diversification Opportunities for Guangdong Wens and Zhejiang Construction
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guangdong and Zhejiang is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction 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 Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Zhejiang Construction go up and down completely randomly.
Pair Corralation between Guangdong Wens and Zhejiang Construction
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the Zhejiang Construction. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 3.83 times less risky than Zhejiang Construction. The stock trades about -0.31 of its potential returns per unit of risk. The Zhejiang Construction Investment is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 948.00 in Zhejiang Construction Investment on September 12, 2024 and sell it today you would earn a total of 115.00 from holding Zhejiang Construction Investment or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Zhejiang Construction Investme
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Zhejiang Construction |
Guangdong Wens and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Zhejiang Construction
The main advantage of trading using opposite Guangdong Wens and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Zhejiang Construction 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 Construction will offset losses from the drop in Zhejiang Construction'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 Construction vs. Lutian Machinery Co | Zhejiang Construction vs. PetroChina Co Ltd | Zhejiang Construction vs. Bank of China | Zhejiang Construction vs. Gansu Jiu Steel |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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