Correlation Between Guangdong Transtek and Hangzhou Gisway
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By analyzing existing cross correlation between Guangdong Transtek Medical and Hangzhou Gisway Information, you can compare the effects of market volatilities on Guangdong Transtek and Hangzhou Gisway 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 Transtek with a short position of Hangzhou Gisway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Transtek and Hangzhou Gisway.
Diversification Opportunities for Guangdong Transtek and Hangzhou Gisway
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Hangzhou is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Transtek Medical and Hangzhou Gisway Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Gisway Info and Guangdong Transtek 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 Transtek Medical are associated (or correlated) with Hangzhou Gisway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Gisway Info has no effect on the direction of Guangdong Transtek i.e., Guangdong Transtek and Hangzhou Gisway go up and down completely randomly.
Pair Corralation between Guangdong Transtek and Hangzhou Gisway
Assuming the 90 days trading horizon Guangdong Transtek Medical is expected to under-perform the Hangzhou Gisway. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Transtek Medical is 1.01 times less risky than Hangzhou Gisway. The stock trades about -0.3 of its potential returns per unit of risk. The Hangzhou Gisway Information is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 3,561 in Hangzhou Gisway Information on October 28, 2024 and sell it today you would lose (374.00) from holding Hangzhou Gisway Information or give up 10.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Transtek Medical vs. Hangzhou Gisway Information
Performance |
| Timeline |
| Guangdong Transtek |
| Hangzhou Gisway Info |
Guangdong Transtek and Hangzhou Gisway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Transtek and Hangzhou Gisway
The main advantage of trading using opposite Guangdong Transtek and Hangzhou Gisway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Transtek position performs unexpectedly, Hangzhou Gisway 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 Hangzhou Gisway will offset losses from the drop in Hangzhou Gisway's long position.The idea behind Guangdong Transtek Medical and Hangzhou Gisway Information pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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