Correlation Between Guangzhou Shangpin and Ye Chiu
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By analyzing existing cross correlation between Guangzhou Shangpin Home and Ye Chiu Metal, you can compare the effects of market volatilities on Guangzhou Shangpin and Ye Chiu 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 Shangpin with a short position of Ye Chiu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Shangpin and Ye Chiu.
Diversification Opportunities for Guangzhou Shangpin and Ye Chiu
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and 601388 is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Shangpin Home and Ye Chiu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ye Chiu Metal and Guangzhou Shangpin 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 Shangpin Home are associated (or correlated) with Ye Chiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ye Chiu Metal has no effect on the direction of Guangzhou Shangpin i.e., Guangzhou Shangpin and Ye Chiu go up and down completely randomly.
Pair Corralation between Guangzhou Shangpin and Ye Chiu
Assuming the 90 days trading horizon Guangzhou Shangpin Home is expected to generate 1.26 times more return on investment than Ye Chiu. However, Guangzhou Shangpin is 1.26 times more volatile than Ye Chiu Metal. It trades about 0.32 of its potential returns per unit of risk. Ye Chiu Metal is currently generating about -0.08 per unit of risk. If you would invest 1,277 in Guangzhou Shangpin Home on September 2, 2024 and sell it today you would earn a total of 206.00 from holding Guangzhou Shangpin Home or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Shangpin Home vs. Ye Chiu Metal
Performance |
| Timeline |
| Guangzhou Shangpin Home |
| Ye Chiu Metal |
Guangzhou Shangpin and Ye Chiu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Shangpin and Ye Chiu
The main advantage of trading using opposite Guangzhou Shangpin and Ye Chiu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Shangpin position performs unexpectedly, Ye Chiu 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 Ye Chiu will offset losses from the drop in Ye Chiu's long position.| Guangzhou Shangpin vs. Guangdong Shenglu Telecommunication | Guangzhou Shangpin vs. Zotye Automobile Co | Guangzhou Shangpin vs. Anhui Deli Household | Guangzhou Shangpin vs. Haima Automobile Group |
| Ye Chiu vs. Wanhua Chemical Group | Ye Chiu vs. Baoshan Iron Steel | Ye Chiu vs. Shandong Gold Mining | Ye Chiu vs. Rongsheng Petrochemical Co |
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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