Correlation Between Guangdong Xiongsu and Kuangda Technology
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By analyzing existing cross correlation between Guangdong Xiongsu Technology and Kuangda Technology Group, you can compare the effects of market volatilities on Guangdong Xiongsu and Kuangda Technology 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 Xiongsu with a short position of Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Xiongsu and Kuangda Technology.
Diversification Opportunities for Guangdong Xiongsu and Kuangda Technology
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Guangdong and Kuangda is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Xiongsu Technology and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology and Guangdong Xiongsu 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 Xiongsu Technology are associated (or correlated) with Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Guangdong Xiongsu i.e., Guangdong Xiongsu and Kuangda Technology go up and down completely randomly.
Pair Corralation between Guangdong Xiongsu and Kuangda Technology
Assuming the 90 days trading horizon Guangdong Xiongsu Technology is expected to generate 1.13 times more return on investment than Kuangda Technology. However, Guangdong Xiongsu is 1.13 times more volatile than Kuangda Technology Group. It trades about -0.02 of its potential returns per unit of risk. Kuangda Technology Group is currently generating about -0.06 per unit of risk. If you would invest 793.00 in Guangdong Xiongsu Technology on September 1, 2024 and sell it today you would lose (19.00) from holding Guangdong Xiongsu Technology or give up 2.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Xiongsu Technology vs. Kuangda Technology Group
Performance |
| Timeline |
| Guangdong Xiongsu |
| Kuangda Technology |
Guangdong Xiongsu and Kuangda Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Xiongsu and Kuangda Technology
The main advantage of trading using opposite Guangdong Xiongsu and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Xiongsu position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.| Guangdong Xiongsu vs. Industrial and Commercial | Guangdong Xiongsu vs. Agricultural Bank of | Guangdong Xiongsu vs. China Construction Bank | Guangdong Xiongsu vs. Bank of China |
| Kuangda Technology vs. Chengdu Kanghua Biological | Kuangda Technology vs. Beijing Wantai Biological | Kuangda Technology vs. Suzhou Novoprotein Scientific | Kuangda Technology vs. Aluminum Corp of |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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