Correlation Between Gansu Jiu and Guangxi Guiguan
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By analyzing existing cross correlation between Gansu Jiu Steel and Guangxi Guiguan Electric, you can compare the effects of market volatilities on Gansu Jiu and Guangxi Guiguan 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 Guangxi Guiguan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Guangxi Guiguan.
Diversification Opportunities for Gansu Jiu and Guangxi Guiguan
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gansu and Guangxi is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Guangxi Guiguan Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangxi Guiguan Electric 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 Guangxi Guiguan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangxi Guiguan Electric has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Guangxi Guiguan go up and down completely randomly.
Pair Corralation between Gansu Jiu and Guangxi Guiguan
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 14.22 times less return on investment than Guangxi Guiguan. In addition to that, Gansu Jiu is 1.59 times more volatile than Guangxi Guiguan Electric. It trades about 0.01 of its total potential returns per unit of risk. Guangxi Guiguan Electric is currently generating about 0.25 per unit of volatility. If you would invest 638.00 in Guangxi Guiguan Electric on September 12, 2024 and sell it today you would earn a total of 56.00 from holding Guangxi Guiguan Electric or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Guangxi Guiguan Electric
Performance |
| Timeline |
| Gansu Jiu Steel |
| Guangxi Guiguan Electric |
Gansu Jiu and Guangxi Guiguan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Guangxi Guiguan
The main advantage of trading using opposite Gansu Jiu and Guangxi Guiguan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Guangxi Guiguan 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 Guangxi Guiguan will offset losses from the drop in Guangxi Guiguan'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 |
| Guangxi Guiguan vs. Gansu Jiu Steel | Guangxi Guiguan vs. Shandong Mining Machinery | Guangxi Guiguan vs. Aba Chemicals Corp | Guangxi Guiguan vs. BlueFocus Communication Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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