Correlation Between Gansu Jiu and Weihai Honglin
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By analyzing existing cross correlation between Gansu Jiu Steel and Weihai Honglin Electronic, you can compare the effects of market volatilities on Gansu Jiu and Weihai Honglin 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 Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Weihai Honglin.
Diversification Opportunities for Gansu Jiu and Weihai Honglin
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Weihai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic 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 Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Weihai Honglin go up and down completely randomly.
Pair Corralation between Gansu Jiu and Weihai Honglin
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 0.76 times more return on investment than Weihai Honglin. However, Gansu Jiu Steel is 1.31 times less risky than Weihai Honglin. It trades about 0.03 of its potential returns per unit of risk. Weihai Honglin Electronic is currently generating about 0.01 per unit of risk. If you would invest 156.00 in Gansu Jiu Steel on September 3, 2024 and sell it today you would earn a total of 18.00 from holding Gansu Jiu Steel or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Weihai Honglin Electronic
Performance |
| Timeline |
| Gansu Jiu Steel |
| Weihai Honglin Electronic |
Gansu Jiu and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Weihai Honglin
The main advantage of trading using opposite Gansu Jiu and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.| Gansu Jiu vs. Cangzhou Mingzhu Plastic | Gansu Jiu vs. Eastern Communications Co | Gansu Jiu vs. Western Metal Materials | Gansu Jiu vs. Ningbo Tip Rubber |
| Weihai Honglin vs. Cultural Investment Holdings | Weihai Honglin vs. Gome Telecom Equipment | Weihai Honglin vs. Bus Online Co | Weihai Honglin vs. Holitech Technology Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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