Correlation Between Guangdong Transtek and Shanghai CEO
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By analyzing existing cross correlation between Guangdong Transtek Medical and Shanghai CEO Environmental, you can compare the effects of market volatilities on Guangdong Transtek and Shanghai CEO 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 Shanghai CEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Transtek and Shanghai CEO.
Diversification Opportunities for Guangdong Transtek and Shanghai CEO
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and Shanghai is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Transtek Medical and Shanghai CEO Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai CEO Environ 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 Shanghai CEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai CEO Environ has no effect on the direction of Guangdong Transtek i.e., Guangdong Transtek and Shanghai CEO go up and down completely randomly.
Pair Corralation between Guangdong Transtek and Shanghai CEO
Assuming the 90 days trading horizon Guangdong Transtek Medical is expected to generate 1.6 times more return on investment than Shanghai CEO. However, Guangdong Transtek is 1.6 times more volatile than Shanghai CEO Environmental. It trades about 0.05 of its potential returns per unit of risk. Shanghai CEO Environmental is currently generating about -0.02 per unit of risk. If you would invest 1,070 in Guangdong Transtek Medical on December 12, 2024 and sell it today you would earn a total of 518.00 from holding Guangdong Transtek Medical or generate 48.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Transtek Medical vs. Shanghai CEO Environmental
Performance |
| Timeline |
| Guangdong Transtek |
| Shanghai CEO Environ |
Guangdong Transtek and Shanghai CEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Transtek and Shanghai CEO
The main advantage of trading using opposite Guangdong Transtek and Shanghai CEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Transtek position performs unexpectedly, Shanghai CEO 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 Shanghai CEO will offset losses from the drop in Shanghai CEO's long position.| Guangdong Transtek vs. Hangzhou Zhongya Machinery | ||
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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