Correlation Between 516220 and Guangdong Tianhe
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By analyzing existing cross correlation between 516220 and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on 516220 and Guangdong Tianhe 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 516220 with a short position of Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of 516220 and Guangdong Tianhe.
Diversification Opportunities for 516220 and Guangdong Tianhe
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 516220 and Guangdong is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding 516220 and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr and 516220 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 516220 are associated (or correlated) with Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of 516220 i.e., 516220 and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between 516220 and Guangdong Tianhe
Assuming the 90 days trading horizon 516220 is expected to generate 4.09 times less return on investment than Guangdong Tianhe. But when comparing it to its historical volatility, 516220 is 1.62 times less risky than Guangdong Tianhe. It trades about 0.08 of its potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 563.00 in Guangdong Tianhe Agricultural on November 7, 2024 and sell it today you would earn a total of 39.00 from holding Guangdong Tianhe Agricultural or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
516220 vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| 516220 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangdong Tianhe Agr |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
516220 and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 516220 and Guangdong Tianhe
The main advantage of trading using opposite 516220 and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 516220 position performs unexpectedly, Guangdong Tianhe 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 Tianhe will offset losses from the drop in Guangdong Tianhe's long position.The idea behind 516220 and Guangdong Tianhe Agricultural 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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