Correlation Between Zhongjing Food and Guosheng Financial
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By analyzing existing cross correlation between Zhongjing Food Co and Guosheng Financial Holding, you can compare the effects of market volatilities on Zhongjing Food and Guosheng Financial 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 Zhongjing Food with a short position of Guosheng Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongjing Food and Guosheng Financial.
Diversification Opportunities for Zhongjing Food and Guosheng Financial
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zhongjing and Guosheng is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Zhongjing Food Co and Guosheng Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guosheng Financial and Zhongjing Food 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 Zhongjing Food Co are associated (or correlated) with Guosheng Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guosheng Financial has no effect on the direction of Zhongjing Food i.e., Zhongjing Food and Guosheng Financial go up and down completely randomly.
Pair Corralation between Zhongjing Food and Guosheng Financial
Assuming the 90 days trading horizon Zhongjing Food is expected to generate 7.51 times less return on investment than Guosheng Financial. But when comparing it to its historical volatility, Zhongjing Food Co is 1.39 times less risky than Guosheng Financial. It trades about 0.02 of its potential returns per unit of risk. Guosheng Financial Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,141 in Guosheng Financial Holding on October 25, 2024 and sell it today you would earn a total of 287.00 from holding Guosheng Financial Holding or generate 25.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongjing Food Co vs. Guosheng Financial Holding
Performance |
| Timeline |
| Zhongjing Food |
| Guosheng Financial |
Zhongjing Food and Guosheng Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongjing Food and Guosheng Financial
The main advantage of trading using opposite Zhongjing Food and Guosheng Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongjing Food position performs unexpectedly, Guosheng Financial 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 Guosheng Financial will offset losses from the drop in Guosheng Financial's long position.| Zhongjing Food vs. Agricultural Bank of | Zhongjing Food vs. Postal Savings Bank | Zhongjing Food vs. Bank of Communications | Zhongjing Food vs. China Merchants Bank |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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