Correlation Between Guangzhou Haozhi and Chengdu Kanghua
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By analyzing existing cross correlation between Guangzhou Haozhi Industrial and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Guangzhou Haozhi and Chengdu Kanghua 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 Guangzhou Haozhi with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haozhi and Chengdu Kanghua.
Diversification Opportunities for Guangzhou Haozhi and Chengdu Kanghua
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Chengdu is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haozhi Industrial and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol and Guangzhou Haozhi 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 Guangzhou Haozhi Industrial are associated (or correlated) with Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Guangzhou Haozhi i.e., Guangzhou Haozhi and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Guangzhou Haozhi and Chengdu Kanghua
Assuming the 90 days trading horizon Guangzhou Haozhi Industrial is expected to generate 1.11 times more return on investment than Chengdu Kanghua. However, Guangzhou Haozhi is 1.11 times more volatile than Chengdu Kanghua Biological. It trades about 0.11 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about 0.03 per unit of risk. If you would invest 1,249 in Guangzhou Haozhi Industrial on September 5, 2024 and sell it today you would earn a total of 716.00 from holding Guangzhou Haozhi Industrial or generate 57.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Haozhi Industrial vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Guangzhou Haozhi Ind |
| Chengdu Kanghua Biol |
Guangzhou Haozhi and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haozhi and Chengdu Kanghua
The main advantage of trading using opposite Guangzhou Haozhi and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haozhi position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Guangzhou Haozhi vs. Chengdu Kanghua Biological | Guangzhou Haozhi vs. Beijing Wantai Biological | Guangzhou Haozhi vs. Suzhou Novoprotein Scientific | Guangzhou Haozhi vs. Aluminum Corp of |
| Chengdu Kanghua vs. Yingde Greatchem Chemicals | Chengdu Kanghua vs. Guangdong Jingyi Metal | Chengdu Kanghua vs. Aluminum Corp of | Chengdu Kanghua vs. YLZ Information Tech |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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