Correlation Between Qinghaihuading Industrial and Guangdong Jingyi
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By analyzing existing cross correlation between Qinghaihuading Industrial Co and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Qinghaihuading Industrial and Guangdong Jingyi 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 Qinghaihuading Industrial with a short position of Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qinghaihuading Industrial and Guangdong Jingyi.
Diversification Opportunities for Qinghaihuading Industrial and Guangdong Jingyi
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Qinghaihuading and Guangdong is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Qinghaihuading Industrial Co and Guangdong Jingyi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jingyi Metal and Qinghaihuading Industrial 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 Qinghaihuading Industrial Co are associated (or correlated) with Guangdong Jingyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jingyi Metal has no effect on the direction of Qinghaihuading Industrial i.e., Qinghaihuading Industrial and Guangdong Jingyi go up and down completely randomly.
Pair Corralation between Qinghaihuading Industrial and Guangdong Jingyi
Assuming the 90 days trading horizon Qinghaihuading Industrial Co is expected to generate 1.2 times more return on investment than Guangdong Jingyi. However, Qinghaihuading Industrial is 1.2 times more volatile than Guangdong Jingyi Metal. It trades about 0.01 of its potential returns per unit of risk. Guangdong Jingyi Metal is currently generating about 0.0 per unit of risk. If you would invest 412.00 in Qinghaihuading Industrial Co on October 7, 2024 and sell it today you would lose (67.00) from holding Qinghaihuading Industrial Co or give up 16.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qinghaihuading Industrial Co vs. Guangdong Jingyi Metal
Performance |
| Timeline |
| Qinghaihuading Industrial |
| Guangdong Jingyi Metal |
Qinghaihuading Industrial and Guangdong Jingyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qinghaihuading Industrial and Guangdong Jingyi
The main advantage of trading using opposite Qinghaihuading Industrial and Guangdong Jingyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qinghaihuading Industrial position performs unexpectedly, Guangdong Jingyi 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 Jingyi will offset losses from the drop in Guangdong Jingyi's long position.The idea behind Qinghaihuading Industrial Co and Guangdong Jingyi Metal 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.
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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