Correlation Between King Strong and Guangdong Advertising
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By analyzing existing cross correlation between King Strong New Material and Guangdong Advertising Co, you can compare the effects of market volatilities on King Strong and Guangdong Advertising 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 King Strong with a short position of Guangdong Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Strong and Guangdong Advertising.
Diversification Opportunities for King Strong and Guangdong Advertising
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between King and Guangdong is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding King Strong New Material and Guangdong Advertising Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Advertising and King Strong 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 King Strong New Material are associated (or correlated) with Guangdong Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Advertising has no effect on the direction of King Strong i.e., King Strong and Guangdong Advertising go up and down completely randomly.
Pair Corralation between King Strong and Guangdong Advertising
Assuming the 90 days trading horizon King Strong is expected to generate 5.18 times less return on investment than Guangdong Advertising. But when comparing it to its historical volatility, King Strong New Material is 1.19 times less risky than Guangdong Advertising. It trades about 0.01 of its potential returns per unit of risk. Guangdong Advertising Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 479.00 in Guangdong Advertising Co on October 16, 2024 and sell it today you would earn a total of 289.00 from holding Guangdong Advertising Co or generate 60.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
King Strong New Material vs. Guangdong Advertising Co
Performance |
| Timeline |
| King Strong New |
| Guangdong Advertising |
King Strong and Guangdong Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with King Strong and Guangdong Advertising
The main advantage of trading using opposite King Strong and Guangdong Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Strong position performs unexpectedly, Guangdong Advertising 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 Guangdong Advertising will offset losses from the drop in Guangdong Advertising's long position.| King Strong vs. Hangzhou Gaoxin Rubber | King Strong vs. Western Metal Materials | King Strong vs. Tongling Nonferrous Metals | King Strong vs. MayAir Technology Co |
| Guangdong Advertising vs. King Strong New Material | Guangdong Advertising vs. Spring Airlines Co | Guangdong Advertising vs. Juneyao Airlines | Guangdong Advertising vs. Guilin Seamild Foods |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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