Correlation Between Guangdong Xiongsu and Changchun Faway
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By analyzing existing cross correlation between Guangdong Xiongsu Technology and Changchun Faway Automobile, you can compare the effects of market volatilities on Guangdong Xiongsu and Changchun Faway 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 Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Xiongsu and Changchun Faway.
Diversification Opportunities for Guangdong Xiongsu and Changchun Faway
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Changchun is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Xiongsu Technology and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway Auto 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 Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of Guangdong Xiongsu i.e., Guangdong Xiongsu and Changchun Faway go up and down completely randomly.
Pair Corralation between Guangdong Xiongsu and Changchun Faway
Assuming the 90 days trading horizon Guangdong Xiongsu Technology is expected to under-perform the Changchun Faway. In addition to that, Guangdong Xiongsu is 1.4 times more volatile than Changchun Faway Automobile. It trades about -0.08 of its total potential returns per unit of risk. Changchun Faway Automobile is currently generating about 0.01 per unit of volatility. If you would invest 948.00 in Changchun Faway Automobile on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Changchun Faway Automobile or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Xiongsu Technology vs. Changchun Faway Automobile
Performance |
| Timeline |
| Guangdong Xiongsu |
| Changchun Faway Auto |
Guangdong Xiongsu and Changchun Faway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Xiongsu and Changchun Faway
The main advantage of trading using opposite Guangdong Xiongsu and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Xiongsu position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.| Guangdong Xiongsu vs. Changchun Faway Automobile | Guangdong Xiongsu vs. CareRay Digital Medical | Guangdong Xiongsu vs. Zhongzhu Medical Holdings | Guangdong Xiongsu vs. Jiangsu Xinri E Vehicle |
| Changchun Faway vs. Lutian Machinery Co | Changchun Faway vs. PetroChina Co Ltd | Changchun Faway vs. Bank of China | Changchun Faway vs. Gansu Jiu Steel |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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