Correlation Between Gansu Jiu and Guangdong Qunxing
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By analyzing existing cross correlation between Gansu Jiu Steel and Guangdong Qunxing Toys, you can compare the effects of market volatilities on Gansu Jiu and Guangdong Qunxing 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 Guangdong Qunxing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Guangdong Qunxing.
Diversification Opportunities for Gansu Jiu and Guangdong Qunxing
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Guangdong is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Guangdong Qunxing Toys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Qunxing Toys 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 Guangdong Qunxing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Qunxing Toys has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Guangdong Qunxing go up and down completely randomly.
Pair Corralation between Gansu Jiu and Guangdong Qunxing
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 2.97 times less return on investment than Guangdong Qunxing. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.6 times less risky than Guangdong Qunxing. It trades about 0.02 of its potential returns per unit of risk. Guangdong Qunxing Toys is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 569.00 in Guangdong Qunxing Toys on September 12, 2024 and sell it today you would earn a total of 274.00 from holding Guangdong Qunxing Toys or generate 48.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Guangdong Qunxing Toys
Performance |
| Timeline |
| Gansu Jiu Steel |
| Guangdong Qunxing Toys |
Gansu Jiu and Guangdong Qunxing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Guangdong Qunxing
The main advantage of trading using opposite Gansu Jiu and Guangdong Qunxing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Guangdong Qunxing 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 Qunxing will offset losses from the drop in Guangdong Qunxing's long position.| Gansu Jiu vs. Zijin Mining Group | Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Baoshan Iron Steel | Gansu Jiu vs. Rongsheng Petrochemical Co |
| Guangdong Qunxing vs. Lutian Machinery Co | Guangdong Qunxing vs. PetroChina Co Ltd | Guangdong Qunxing vs. Bank of China | Guangdong Qunxing vs. Gansu Jiu Steel |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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