Correlation Between Gansu Jiu and Guangzhou Zhujiang
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By analyzing existing cross correlation between Gansu Jiu Steel and Guangzhou Zhujiang Brewery, you can compare the effects of market volatilities on Gansu Jiu and Guangzhou Zhujiang 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 Gansu Jiu with a short position of Guangzhou Zhujiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Guangzhou Zhujiang.
Diversification Opportunities for Gansu Jiu and Guangzhou Zhujiang
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gansu and Guangzhou is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Guangzhou Zhujiang Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Zhujiang and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with Guangzhou Zhujiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Zhujiang has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Guangzhou Zhujiang go up and down completely randomly.
Pair Corralation between Gansu Jiu and Guangzhou Zhujiang
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 1.25 times more return on investment than Guangzhou Zhujiang. However, Gansu Jiu is 1.25 times more volatile than Guangzhou Zhujiang Brewery. It trades about 0.02 of its potential returns per unit of risk. Guangzhou Zhujiang Brewery is currently generating about 0.02 per unit of risk. If you would invest 158.00 in Gansu Jiu Steel on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Gansu Jiu Steel or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Guangzhou Zhujiang Brewery
Performance |
| Timeline |
| Gansu Jiu Steel |
| Guangzhou Zhujiang |
Gansu Jiu and Guangzhou Zhujiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Guangzhou Zhujiang
The main advantage of trading using opposite Gansu Jiu and Guangzhou Zhujiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Guangzhou Zhujiang 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 Zhujiang will offset losses from the drop in Guangzhou Zhujiang's long position.| Gansu Jiu vs. Jinhe Biotechnology Co | Gansu Jiu vs. Southern PublishingMedia Co | Gansu Jiu vs. Guangdong Marubi Biotechnology | Gansu Jiu vs. Time Publishing and |
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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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