Correlation Between Guangzhou Haozhi and Pengxin International
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By analyzing existing cross correlation between Guangzhou Haozhi Industrial and Pengxin International Mining, you can compare the effects of market volatilities on Guangzhou Haozhi and Pengxin International 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 Pengxin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haozhi and Pengxin International.
Diversification Opportunities for Guangzhou Haozhi and Pengxin International
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Pengxin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haozhi Industrial and Pengxin International Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pengxin International 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 Pengxin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pengxin International has no effect on the direction of Guangzhou Haozhi i.e., Guangzhou Haozhi and Pengxin International go up and down completely randomly.
Pair Corralation between Guangzhou Haozhi and Pengxin International
Assuming the 90 days trading horizon Guangzhou Haozhi Industrial is expected to generate 1.3 times more return on investment than Pengxin International. However, Guangzhou Haozhi is 1.3 times more volatile than Pengxin International Mining. It trades about 0.04 of its potential returns per unit of risk. Pengxin International Mining is currently generating about 0.03 per unit of risk. If you would invest 1,502 in Guangzhou Haozhi Industrial on August 25, 2024 and sell it today you would earn a total of 274.00 from holding Guangzhou Haozhi Industrial or generate 18.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Haozhi Industrial vs. Pengxin International Mining
Performance |
| Timeline |
| Guangzhou Haozhi Ind |
| Pengxin International |
Guangzhou Haozhi and Pengxin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haozhi and Pengxin International
The main advantage of trading using opposite Guangzhou Haozhi and Pengxin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haozhi position performs unexpectedly, Pengxin International 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 Pengxin International will offset losses from the drop in Pengxin International's long position.| Guangzhou Haozhi vs. Biwin Storage Technology | Guangzhou Haozhi vs. PetroChina Co Ltd | Guangzhou Haozhi vs. Industrial and Commercial | Guangzhou Haozhi vs. China Construction Bank |
| Pengxin International vs. Zijin Mining Group | Pengxin International vs. Wanhua Chemical Group | Pengxin International vs. Baoshan Iron Steel | Pengxin International vs. Shandong Gold Mining |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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