Correlation Between China Sports and Guangdong Xiongsu
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By analyzing existing cross correlation between China Sports Industry and Guangdong Xiongsu Technology, you can compare the effects of market volatilities on China Sports and Guangdong Xiongsu 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 Sports with a short position of Guangdong Xiongsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Sports and Guangdong Xiongsu.
Diversification Opportunities for China Sports and Guangdong Xiongsu
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Guangdong is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding China Sports Industry and Guangdong Xiongsu Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Xiongsu and China Sports 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 Sports Industry are associated (or correlated) with Guangdong Xiongsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Xiongsu has no effect on the direction of China Sports i.e., China Sports and Guangdong Xiongsu go up and down completely randomly.
Pair Corralation between China Sports and Guangdong Xiongsu
Assuming the 90 days trading horizon China Sports Industry is expected to generate 0.61 times more return on investment than Guangdong Xiongsu. However, China Sports Industry is 1.64 times less risky than Guangdong Xiongsu. It trades about 0.07 of its potential returns per unit of risk. Guangdong Xiongsu Technology is currently generating about -0.06 per unit of risk. If you would invest 767.00 in China Sports Industry on November 7, 2024 and sell it today you would earn a total of 13.00 from holding China Sports Industry or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Sports Industry vs. Guangdong Xiongsu Technology
Performance |
| Timeline |
| China Sports Industry |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangdong Xiongsu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Sports and Guangdong Xiongsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Sports and Guangdong Xiongsu
The main advantage of trading using opposite China Sports and Guangdong Xiongsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Sports position performs unexpectedly, Guangdong Xiongsu 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 Xiongsu will offset losses from the drop in Guangdong Xiongsu's long position.The idea behind China Sports Industry and Guangdong Xiongsu 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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