Correlation Between Guangxi Guiguan and Fujian Newland
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By analyzing existing cross correlation between Guangxi Guiguan Electric and Fujian Newland Computer, you can compare the effects of market volatilities on Guangxi Guiguan and Fujian Newland 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 Guangxi Guiguan with a short position of Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangxi Guiguan and Fujian Newland.
Diversification Opportunities for Guangxi Guiguan and Fujian Newland
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangxi and Fujian is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Guangxi Guiguan Electric and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer and Guangxi Guiguan 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 Guangxi Guiguan Electric are associated (or correlated) with Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Guangxi Guiguan i.e., Guangxi Guiguan and Fujian Newland go up and down completely randomly.
Pair Corralation between Guangxi Guiguan and Fujian Newland
Assuming the 90 days trading horizon Guangxi Guiguan Electric is expected to under-perform the Fujian Newland. But the stock apears to be less risky and, when comparing its historical volatility, Guangxi Guiguan Electric is 3.17 times less risky than Fujian Newland. The stock trades about -0.1 of its potential returns per unit of risk. The Fujian Newland Computer is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,788 in Fujian Newland Computer on August 28, 2024 and sell it today you would earn a total of 150.00 from holding Fujian Newland Computer or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangxi Guiguan Electric vs. Fujian Newland Computer
Performance |
| Timeline |
| Guangxi Guiguan Electric |
| Fujian Newland Computer |
Guangxi Guiguan and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangxi Guiguan and Fujian Newland
The main advantage of trading using opposite Guangxi Guiguan and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangxi Guiguan position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| Guangxi Guiguan vs. BYD Co Ltd | Guangxi Guiguan vs. China Mobile Limited | Guangxi Guiguan vs. Agricultural Bank of | Guangxi Guiguan vs. Industrial and Commercial |
| Fujian Newland vs. Agricultural Bank of | Fujian Newland vs. Industrial and Commercial | Fujian Newland vs. Bank of China | Fujian Newland vs. PetroChina Co Ltd |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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