Correlation Between Guangxi Guiguan and Tangshan Port
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By analyzing existing cross correlation between Guangxi Guiguan Electric and Tangshan Port Group, you can compare the effects of market volatilities on Guangxi Guiguan and Tangshan Port 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 Tangshan Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangxi Guiguan and Tangshan Port.
Diversification Opportunities for Guangxi Guiguan and Tangshan Port
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangxi and Tangshan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Guangxi Guiguan Electric and Tangshan Port Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangshan Port Group 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 Tangshan Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangshan Port Group has no effect on the direction of Guangxi Guiguan i.e., Guangxi Guiguan and Tangshan Port go up and down completely randomly.
Pair Corralation between Guangxi Guiguan and Tangshan Port
Assuming the 90 days trading horizon Guangxi Guiguan Electric is expected to generate 1.05 times more return on investment than Tangshan Port. However, Guangxi Guiguan is 1.05 times more volatile than Tangshan Port Group. It trades about 0.24 of its potential returns per unit of risk. Tangshan Port Group is currently generating about 0.12 per unit of risk. If you would invest 638.00 in Guangxi Guiguan Electric on September 12, 2024 and sell it today you would earn a total of 49.00 from holding Guangxi Guiguan Electric or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Guangxi Guiguan Electric vs. Tangshan Port Group
Performance |
| Timeline |
| Guangxi Guiguan Electric |
| Tangshan Port Group |
Guangxi Guiguan and Tangshan Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangxi Guiguan and Tangshan Port
The main advantage of trading using opposite Guangxi Guiguan and Tangshan Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangxi Guiguan position performs unexpectedly, Tangshan Port 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 Tangshan Port will offset losses from the drop in Tangshan Port's long position.| Guangxi Guiguan vs. Gansu Jiu Steel | Guangxi Guiguan vs. Shandong Mining Machinery | Guangxi Guiguan vs. Aba Chemicals Corp | Guangxi Guiguan vs. BlueFocus Communication Group |
| Tangshan Port vs. Beijing SPC Environment | Tangshan Port vs. Gansu Jiu Steel | Tangshan Port vs. Shanghai Broadband Technology | Tangshan Port vs. Silkroad Visual Technology |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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