Correlation Between Gansu Jiu and Caihong Display
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By analyzing existing cross correlation between Gansu Jiu Steel and Caihong Display Devices, you can compare the effects of market volatilities on Gansu Jiu and Caihong Display 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 Caihong Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Caihong Display.
Diversification Opportunities for Gansu Jiu and Caihong Display
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Caihong is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Caihong Display Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caihong Display Devices 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 Caihong Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caihong Display Devices has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Caihong Display go up and down completely randomly.
Pair Corralation between Gansu Jiu and Caihong Display
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 1.71 times less return on investment than Caihong Display. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.26 times less risky than Caihong Display. It trades about 0.03 of its potential returns per unit of risk. Caihong Display Devices is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 594.00 in Caihong Display Devices on September 12, 2024 and sell it today you would earn a total of 142.00 from holding Caihong Display Devices or generate 23.91% 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. Caihong Display Devices
Performance |
| Timeline |
| Gansu Jiu Steel |
| Caihong Display Devices |
Gansu Jiu and Caihong Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Caihong Display
The main advantage of trading using opposite Gansu Jiu and Caihong Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Caihong Display 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 Caihong Display will offset losses from the drop in Caihong Display'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 |
| Caihong Display vs. Gansu Jiu Steel | Caihong Display vs. Shandong Mining Machinery | Caihong Display vs. Aba Chemicals Corp | Caihong Display 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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