Correlation Between Gansu Jiu and Guangdong Wens
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By analyzing existing cross correlation between Gansu Jiu Steel and Guangdong Wens Foodstuff, you can compare the effects of market volatilities on Gansu Jiu and Guangdong Wens 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 Wens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Guangdong Wens.
Diversification Opportunities for Gansu Jiu and Guangdong Wens
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Guangdong is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Guangdong Wens Foodstuff in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Wens Foodstuff 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 Wens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Wens Foodstuff has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Guangdong Wens go up and down completely randomly.
Pair Corralation between Gansu Jiu and Guangdong Wens
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 1.09 times more return on investment than Guangdong Wens. However, Gansu Jiu is 1.09 times more volatile than Guangdong Wens Foodstuff. It trades about 0.02 of its potential returns per unit of risk. Guangdong Wens Foodstuff is currently generating about -0.01 per unit of risk. If you would invest 156.00 in Gansu Jiu Steel on August 31, 2024 and sell it today you would earn a total of 9.00 from holding Gansu Jiu Steel or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Guangdong Wens Foodstuff
Performance |
| Timeline |
| Gansu Jiu Steel |
| Guangdong Wens Foodstuff |
Gansu Jiu and Guangdong Wens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Guangdong Wens
The main advantage of trading using opposite Gansu Jiu and Guangdong Wens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Guangdong Wens 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 Wens will offset losses from the drop in Guangdong Wens' long position.| Gansu Jiu vs. China Sports Industry | Gansu Jiu vs. Sichuan Fulin Transportation | Gansu Jiu vs. Guizhou Chanhen Chemical | Gansu Jiu vs. Lianhe Chemical Technology |
| Guangdong Wens vs. Lutian Machinery Co | Guangdong Wens vs. PetroChina Co Ltd | Guangdong Wens vs. Bank of China | Guangdong Wens 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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