Correlation Between Qinghaihuading Industrial and Guangzhou Shangpin
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By analyzing existing cross correlation between Qinghaihuading Industrial Co and Guangzhou Shangpin Home, you can compare the effects of market volatilities on Qinghaihuading Industrial and Guangzhou Shangpin 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 Guangzhou Shangpin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qinghaihuading Industrial and Guangzhou Shangpin.
Diversification Opportunities for Qinghaihuading Industrial and Guangzhou Shangpin
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qinghaihuading and Guangzhou is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Qinghaihuading Industrial Co and Guangzhou Shangpin Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Shangpin Home 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 Guangzhou Shangpin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Shangpin Home has no effect on the direction of Qinghaihuading Industrial i.e., Qinghaihuading Industrial and Guangzhou Shangpin go up and down completely randomly.
Pair Corralation between Qinghaihuading Industrial and Guangzhou Shangpin
Assuming the 90 days trading horizon Qinghaihuading Industrial Co is expected to under-perform the Guangzhou Shangpin. In addition to that, Qinghaihuading Industrial is 1.21 times more volatile than Guangzhou Shangpin Home. It trades about -0.05 of its total potential returns per unit of risk. Guangzhou Shangpin Home is currently generating about 0.24 per unit of volatility. If you would invest 1,305 in Guangzhou Shangpin Home on August 31, 2024 and sell it today you would earn a total of 158.00 from holding Guangzhou Shangpin Home or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qinghaihuading Industrial Co vs. Guangzhou Shangpin Home
Performance |
| Timeline |
| Qinghaihuading Industrial |
| Guangzhou Shangpin Home |
Qinghaihuading Industrial and Guangzhou Shangpin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qinghaihuading Industrial and Guangzhou Shangpin
The main advantage of trading using opposite Qinghaihuading Industrial and Guangzhou Shangpin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qinghaihuading Industrial position performs unexpectedly, Guangzhou Shangpin 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 Guangzhou Shangpin will offset losses from the drop in Guangzhou Shangpin's long position.The idea behind Qinghaihuading Industrial Co and Guangzhou Shangpin Home 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.
| Guangzhou Shangpin vs. China State Construction | Guangzhou Shangpin vs. China Merchants Shekou | Guangzhou Shangpin vs. Huafa Industrial Co | Guangzhou Shangpin vs. China International Capital |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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