Correlation Between Guangdong Brandmax and Shaanxi Construction
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By analyzing existing cross correlation between Guangdong Brandmax Marketing and Shaanxi Construction Machinery, you can compare the effects of market volatilities on Guangdong Brandmax and Shaanxi Construction 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 Brandmax with a short position of Shaanxi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Brandmax and Shaanxi Construction.
Diversification Opportunities for Guangdong Brandmax and Shaanxi Construction
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Shaanxi is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Brandmax Marketing and Shaanxi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Construction and Guangdong Brandmax 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 Brandmax Marketing are associated (or correlated) with Shaanxi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Construction has no effect on the direction of Guangdong Brandmax i.e., Guangdong Brandmax and Shaanxi Construction go up and down completely randomly.
Pair Corralation between Guangdong Brandmax and Shaanxi Construction
Assuming the 90 days trading horizon Guangdong Brandmax Marketing is expected to generate 1.24 times more return on investment than Shaanxi Construction. However, Guangdong Brandmax is 1.24 times more volatile than Shaanxi Construction Machinery. It trades about 0.04 of its potential returns per unit of risk. Shaanxi Construction Machinery is currently generating about -0.02 per unit of risk. If you would invest 663.00 in Guangdong Brandmax Marketing on September 12, 2024 and sell it today you would earn a total of 353.00 from holding Guangdong Brandmax Marketing or generate 53.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Brandmax Marketing vs. Shaanxi Construction Machinery
Performance |
| Timeline |
| Guangdong Brandmax |
| Shaanxi Construction |
Guangdong Brandmax and Shaanxi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Brandmax and Shaanxi Construction
The main advantage of trading using opposite Guangdong Brandmax and Shaanxi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Brandmax position performs unexpectedly, Shaanxi Construction 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 Shaanxi Construction will offset losses from the drop in Shaanxi Construction's long position.| Guangdong Brandmax vs. Kweichow Moutai Co | Guangdong Brandmax vs. Shenzhen Mindray Bio Medical | Guangdong Brandmax vs. G bits Network Technology | Guangdong Brandmax vs. Beijing Roborock Technology |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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