Correlation Between Anhui Huaren and Guangzhou KingTeller
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By analyzing existing cross correlation between Anhui Huaren Health and Guangzhou KingTeller Technology, you can compare the effects of market volatilities on Anhui Huaren and Guangzhou KingTeller 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 Anhui Huaren with a short position of Guangzhou KingTeller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaren and Guangzhou KingTeller.
Diversification Opportunities for Anhui Huaren and Guangzhou KingTeller
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anhui and Guangzhou is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaren Health and Guangzhou KingTeller Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou KingTeller and Anhui Huaren 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 Anhui Huaren Health are associated (or correlated) with Guangzhou KingTeller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou KingTeller has no effect on the direction of Anhui Huaren i.e., Anhui Huaren and Guangzhou KingTeller go up and down completely randomly.
Pair Corralation between Anhui Huaren and Guangzhou KingTeller
Assuming the 90 days trading horizon Anhui Huaren is expected to generate 30.1 times less return on investment than Guangzhou KingTeller. But when comparing it to its historical volatility, Anhui Huaren Health is 2.62 times less risky than Guangzhou KingTeller. It trades about 0.02 of its potential returns per unit of risk. Guangzhou KingTeller Technology is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 401.00 in Guangzhou KingTeller Technology on November 7, 2024 and sell it today you would earn a total of 57.00 from holding Guangzhou KingTeller Technology or generate 14.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Huaren Health vs. Guangzhou KingTeller Technolog
Performance |
| Timeline |
| Anhui Huaren Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangzhou KingTeller |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Anhui Huaren and Guangzhou KingTeller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaren and Guangzhou KingTeller
The main advantage of trading using opposite Anhui Huaren and Guangzhou KingTeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaren position performs unexpectedly, Guangzhou KingTeller 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 Guangzhou KingTeller will offset losses from the drop in Guangzhou KingTeller's long position.The idea behind Anhui Huaren Health and Guangzhou KingTeller Technology 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.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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