Correlation Between Guangdong Wens and Runjian Communication
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Runjian Communication Co, you can compare the effects of market volatilities on Guangdong Wens and Runjian Communication 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 Runjian Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Runjian Communication.
Diversification Opportunities for Guangdong Wens and Runjian Communication
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangdong and Runjian is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Runjian Communication Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Runjian Communication 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 Runjian Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Runjian Communication has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Runjian Communication go up and down completely randomly.
Pair Corralation between Guangdong Wens and Runjian Communication
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the Runjian Communication. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 3.93 times less risky than Runjian Communication. The stock trades about -0.52 of its potential returns per unit of risk. The Runjian Communication Co is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 3,234 in Runjian Communication Co on October 14, 2024 and sell it today you would lose (262.00) from holding Runjian Communication Co or give up 8.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Runjian Communication Co
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Runjian Communication |
Guangdong Wens and Runjian Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Runjian Communication
The main advantage of trading using opposite Guangdong Wens and Runjian Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Runjian Communication 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 Runjian Communication will offset losses from the drop in Runjian Communication's long position.| Guangdong Wens vs. Muyuan Foodstuff Co | Guangdong Wens vs. Shanghai Ziyan Foods | Guangdong Wens vs. Xiangyu Medical Co | Guangdong Wens vs. Winner Medical 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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