Correlation Between GANGLONG CHINA and SEAZEN GROUP
Can any of the company-specific risk be diversified away by investing in both GANGLONG CHINA and SEAZEN GROUP at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GANGLONG CHINA and SEAZEN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GANGLONG CHINA PRGRLTD and SEAZEN GROUP LTD, you can compare the effects of market volatilities on GANGLONG CHINA and SEAZEN GROUP 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 GANGLONG CHINA with a short position of SEAZEN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GANGLONG CHINA and SEAZEN GROUP.
Diversification Opportunities for GANGLONG CHINA and SEAZEN GROUP
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GANGLONG and SEAZEN is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding GANGLONG CHINA PRGRLTD and SEAZEN GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEAZEN GROUP LTD and GANGLONG CHINA 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 GANGLONG CHINA PRGRLTD are associated (or correlated) with SEAZEN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEAZEN GROUP LTD has no effect on the direction of GANGLONG CHINA i.e., GANGLONG CHINA and SEAZEN GROUP go up and down completely randomly.
Pair Corralation between GANGLONG CHINA and SEAZEN GROUP
Assuming the 90 days horizon GANGLONG CHINA PRGRLTD is expected to generate 7.73 times more return on investment than SEAZEN GROUP. However, GANGLONG CHINA is 7.73 times more volatile than SEAZEN GROUP LTD. It trades about 0.06 of its potential returns per unit of risk. SEAZEN GROUP LTD is currently generating about -0.14 per unit of risk. If you would invest 1.85 in GANGLONG CHINA PRGRLTD on October 14, 2024 and sell it today you would lose (1.05) from holding GANGLONG CHINA PRGRLTD or give up 56.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GANGLONG CHINA PRGRLTD vs. SEAZEN GROUP LTD
Performance |
| Timeline |
| GANGLONG CHINA PRGRLTD |
| SEAZEN GROUP LTD |
GANGLONG CHINA and SEAZEN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GANGLONG CHINA and SEAZEN GROUP
The main advantage of trading using opposite GANGLONG CHINA and SEAZEN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GANGLONG CHINA position performs unexpectedly, SEAZEN GROUP 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 SEAZEN GROUP will offset losses from the drop in SEAZEN GROUP's long position.| GANGLONG CHINA vs. MeVis Medical Solutions | GANGLONG CHINA vs. FIREWEED METALS P | GANGLONG CHINA vs. CREO MEDICAL GRP | GANGLONG CHINA vs. Merit Medical Systems |
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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 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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