Correlation Between Guangdong Wens and Guangzhou Restaurants
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Guangzhou Restaurants Group, you can compare the effects of market volatilities on Guangdong Wens and Guangzhou Restaurants 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 Guangzhou Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Guangzhou Restaurants.
Diversification Opportunities for Guangdong Wens and Guangzhou Restaurants
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Guangzhou is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Guangzhou Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants 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 Guangzhou Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Restaurants has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between Guangdong Wens and Guangzhou Restaurants
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to generate 1.02 times more return on investment than Guangzhou Restaurants. However, Guangdong Wens is 1.02 times more volatile than Guangzhou Restaurants Group. It trades about 0.0 of its potential returns per unit of risk. Guangzhou Restaurants Group is currently generating about -0.03 per unit of risk. If you would invest 1,824 in Guangdong Wens Foodstuff on September 3, 2024 and sell it today you would lose (90.00) from holding Guangdong Wens Foodstuff or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Guangzhou Restaurants Group
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Guangzhou Restaurants |
Guangdong Wens and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Guangzhou Restaurants
The main advantage of trading using opposite Guangdong Wens and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Guangzhou Restaurants 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 Guangzhou Restaurants will offset losses from the drop in Guangzhou Restaurants' long position.| Guangdong Wens vs. Beijing Wantai Biological | Guangdong Wens vs. Aluminum Corp of | Guangdong Wens vs. COL Digital Publishing | Guangdong Wens vs. Shaanxi Meineng Clean |
| Guangzhou Restaurants vs. PetroChina Co Ltd | Guangzhou Restaurants vs. China Mobile Limited | Guangzhou Restaurants vs. Industrial and Commercial | Guangzhou Restaurants vs. China Life Insurance |
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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