Correlation Between Wintao Communications and Gansu Huangtai
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By analyzing existing cross correlation between Wintao Communications Co and Gansu Huangtai Wine marketing, you can compare the effects of market volatilities on Wintao Communications and Gansu Huangtai 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 Wintao Communications with a short position of Gansu Huangtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintao Communications and Gansu Huangtai.
Diversification Opportunities for Wintao Communications and Gansu Huangtai
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wintao and Gansu is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Wintao Communications Co and Gansu Huangtai Wine marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Huangtai Wine and Wintao Communications 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 Wintao Communications Co are associated (or correlated) with Gansu Huangtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Huangtai Wine has no effect on the direction of Wintao Communications i.e., Wintao Communications and Gansu Huangtai go up and down completely randomly.
Pair Corralation between Wintao Communications and Gansu Huangtai
Assuming the 90 days trading horizon Wintao Communications is expected to generate 8.04 times less return on investment than Gansu Huangtai. But when comparing it to its historical volatility, Wintao Communications Co is 1.35 times less risky than Gansu Huangtai. It trades about 0.02 of its potential returns per unit of risk. Gansu Huangtai Wine marketing is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 812.00 in Gansu Huangtai Wine marketing on October 30, 2024 and sell it today you would earn a total of 664.00 from holding Gansu Huangtai Wine marketing or generate 81.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintao Communications Co vs. Gansu Huangtai Wine marketing
Performance |
| Timeline |
| Wintao Communications |
| Gansu Huangtai Wine |
Wintao Communications and Gansu Huangtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintao Communications and Gansu Huangtai
The main advantage of trading using opposite Wintao Communications and Gansu Huangtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintao Communications position performs unexpectedly, Gansu Huangtai 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 Gansu Huangtai will offset losses from the drop in Gansu Huangtai's long position.The idea behind Wintao Communications Co and Gansu Huangtai Wine marketing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stocks Directory module to find actively traded stocks across global markets.
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