Correlation Between China World and Guangdong Skychem
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By analyzing existing cross correlation between China World Trade and Guangdong Skychem Technology, you can compare the effects of market volatilities on China World and Guangdong Skychem 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 China World with a short position of Guangdong Skychem. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and Guangdong Skychem.
Diversification Opportunities for China World and Guangdong Skychem
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Guangdong is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and Guangdong Skychem Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Skychem and China World 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 China World Trade are associated (or correlated) with Guangdong Skychem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Skychem has no effect on the direction of China World i.e., China World and Guangdong Skychem go up and down completely randomly.
Pair Corralation between China World and Guangdong Skychem
Assuming the 90 days trading horizon China World Trade is expected to generate 0.29 times more return on investment than Guangdong Skychem. However, China World Trade is 3.44 times less risky than Guangdong Skychem. It trades about 0.09 of its potential returns per unit of risk. Guangdong Skychem Technology is currently generating about -0.1 per unit of risk. If you would invest 2,446 in China World Trade on November 1, 2024 and sell it today you would earn a total of 50.00 from holding China World Trade or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China World Trade vs. Guangdong Skychem Technology
Performance |
| Timeline |
| China World Trade |
| Guangdong Skychem |
China World and Guangdong Skychem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China World and Guangdong Skychem
The main advantage of trading using opposite China World and Guangdong Skychem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World position performs unexpectedly, Guangdong Skychem 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 Skychem will offset losses from the drop in Guangdong Skychem's long position.| China World vs. New Hope Dairy | China World vs. Jiajia Food Group | China World vs. Hefei Metalforming Mach | China World vs. Guangdong Jingyi Metal |
| Guangdong Skychem vs. China World Trade | Guangdong Skychem vs. Fujian Anjoy Foods | Guangdong Skychem vs. Shanghai Ziyan Foods | Guangdong Skychem vs. Shenyang Chemical Industry |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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