Correlation Between Wuhan Yangtze and Guangzhou Seagull
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Guangzhou Seagull Kitchen, you can compare the effects of market volatilities on Wuhan Yangtze and Guangzhou Seagull 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 Wuhan Yangtze with a short position of Guangzhou Seagull. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Guangzhou Seagull.
Diversification Opportunities for Wuhan Yangtze and Guangzhou Seagull
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wuhan and Guangzhou is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Guangzhou Seagull Kitchen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Seagull Kitchen and Wuhan Yangtze 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 Wuhan Yangtze Communication are associated (or correlated) with Guangzhou Seagull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Seagull Kitchen has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Guangzhou Seagull go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Guangzhou Seagull
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 3.08 times more return on investment than Guangzhou Seagull. However, Wuhan Yangtze is 3.08 times more volatile than Guangzhou Seagull Kitchen. It trades about 0.32 of its potential returns per unit of risk. Guangzhou Seagull Kitchen is currently generating about 0.33 per unit of risk. If you would invest 1,865 in Wuhan Yangtze Communication on September 5, 2024 and sell it today you would earn a total of 977.00 from holding Wuhan Yangtze Communication or generate 52.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Guangzhou Seagull Kitchen
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Guangzhou Seagull Kitchen |
Wuhan Yangtze and Guangzhou Seagull Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Guangzhou Seagull
The main advantage of trading using opposite Wuhan Yangtze and Guangzhou Seagull positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Guangzhou Seagull 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 Guangzhou Seagull will offset losses from the drop in Guangzhou Seagull's long position.| Wuhan Yangtze vs. Industrial and Commercial | Wuhan Yangtze vs. China Construction Bank | Wuhan Yangtze vs. Bank of China | Wuhan Yangtze vs. Agricultural Bank of |
| Guangzhou Seagull vs. Ming Yang Smart | Guangzhou Seagull vs. 159681 | Guangzhou Seagull vs. 159005 | Guangzhou Seagull vs. Loctek Ergonomic Technology |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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