Correlation Between Guangdong Wens and Spearhead Integrated
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Spearhead Integrated Marketing, you can compare the effects of market volatilities on Guangdong Wens and Spearhead Integrated 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 Spearhead Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Spearhead Integrated.
Diversification Opportunities for Guangdong Wens and Spearhead Integrated
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Spearhead is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Spearhead Integrated Marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spearhead Integrated 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 Spearhead Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spearhead Integrated has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Spearhead Integrated go up and down completely randomly.
Pair Corralation between Guangdong Wens and Spearhead Integrated
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the Spearhead Integrated. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 4.22 times less risky than Spearhead Integrated. The stock trades about -0.24 of its potential returns per unit of risk. The Spearhead Integrated Marketing is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 384.00 in Spearhead Integrated Marketing on August 31, 2024 and sell it today you would earn a total of 78.00 from holding Spearhead Integrated Marketing or generate 20.31% 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. Spearhead Integrated Marketing
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Spearhead Integrated |
Guangdong Wens and Spearhead Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Spearhead Integrated
The main advantage of trading using opposite Guangdong Wens and Spearhead Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Spearhead Integrated 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 Spearhead Integrated will offset losses from the drop in Spearhead Integrated's long position.| Guangdong Wens vs. Lutian Machinery Co | Guangdong Wens vs. PetroChina Co Ltd | Guangdong Wens vs. Bank of China | Guangdong Wens 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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