Correlation Between Guangdong Wens and Hainan Haiqi
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Hainan Haiqi Transportation, you can compare the effects of market volatilities on Guangdong Wens and Hainan Haiqi 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 Hainan Haiqi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Hainan Haiqi.
Diversification Opportunities for Guangdong Wens and Hainan Haiqi
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Hainan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Hainan Haiqi Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Haiqi Transpo 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 Hainan Haiqi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Haiqi Transpo has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Hainan Haiqi go up and down completely randomly.
Pair Corralation between Guangdong Wens and Hainan Haiqi
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to generate 0.4 times more return on investment than Hainan Haiqi. However, Guangdong Wens Foodstuff is 2.52 times less risky than Hainan Haiqi. It trades about -0.24 of its potential returns per unit of risk. Hainan Haiqi Transportation is currently generating about -0.09 per unit of risk. If you would invest 1,696 in Guangdong Wens Foodstuff on October 28, 2024 and sell it today you would lose (96.00) from holding Guangdong Wens Foodstuff or give up 5.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Hainan Haiqi Transportation
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Hainan Haiqi Transpo |
Guangdong Wens and Hainan Haiqi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Hainan Haiqi
The main advantage of trading using opposite Guangdong Wens and Hainan Haiqi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Hainan Haiqi 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 Hainan Haiqi will offset losses from the drop in Hainan Haiqi's long position.| Guangdong Wens vs. Luyin Investment Group | Guangdong Wens vs. Cultural Investment Holdings | Guangdong Wens vs. China Asset Management | Guangdong Wens vs. Jointo Energy Investment |
| Hainan Haiqi vs. Anhui Jianghuai Automobile | Hainan Haiqi vs. Xiangyang Automobile Bearing | Hainan Haiqi vs. Haima Automobile Group | Hainan Haiqi vs. Runjian Communication 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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