Correlation Between Guangdong Wens and Shandong Homey
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Shandong Homey Aquatic, you can compare the effects of market volatilities on Guangdong Wens and Shandong Homey 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 Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Shandong Homey.
Diversification Opportunities for Guangdong Wens and Shandong Homey
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangdong and Shandong is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic 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 Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Shandong Homey go up and down completely randomly.
Pair Corralation between Guangdong Wens and Shandong Homey
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the Shandong Homey. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 2.84 times less risky than Shandong Homey. The stock trades about -0.16 of its potential returns per unit of risk. The Shandong Homey Aquatic is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 184.00 in Shandong Homey Aquatic on October 14, 2024 and sell it today you would earn a total of 34.00 from holding Shandong Homey Aquatic or generate 18.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Shandong Homey Aquatic
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Shandong Homey Aquatic |
Guangdong Wens and Shandong Homey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Shandong Homey
The main advantage of trading using opposite Guangdong Wens and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Shandong Homey 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 Shandong Homey will offset losses from the drop in Shandong Homey'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 |
| Shandong Homey vs. Guangdong Wens Foodstuff | Shandong Homey vs. Guilin Seamild Foods | Shandong Homey vs. Olympic Circuit Technology | Shandong Homey vs. Linewell Software 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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