Correlation Between Guangxi Wuzhou and Nanhua Bio
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By analyzing existing cross correlation between Guangxi Wuzhou Communications and Nanhua Bio Medicine, you can compare the effects of market volatilities on Guangxi Wuzhou and Nanhua Bio 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 Guangxi Wuzhou with a short position of Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangxi Wuzhou and Nanhua Bio.
Diversification Opportunities for Guangxi Wuzhou and Nanhua Bio
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Guangxi and Nanhua is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Guangxi Wuzhou Communications and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine and Guangxi Wuzhou 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 Guangxi Wuzhou Communications are associated (or correlated) with Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of Guangxi Wuzhou i.e., Guangxi Wuzhou and Nanhua Bio go up and down completely randomly.
Pair Corralation between Guangxi Wuzhou and Nanhua Bio
Assuming the 90 days trading horizon Guangxi Wuzhou Communications is expected to under-perform the Nanhua Bio. But the stock apears to be less risky and, when comparing its historical volatility, Guangxi Wuzhou Communications is 1.17 times less risky than Nanhua Bio. The stock trades about -0.25 of its potential returns per unit of risk. The Nanhua Bio Medicine is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 825.00 in Nanhua Bio Medicine on November 2, 2024 and sell it today you would earn a total of 60.00 from holding Nanhua Bio Medicine or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangxi Wuzhou Communications vs. Nanhua Bio Medicine
Performance |
| Timeline |
| Guangxi Wuzhou Commu |
| Nanhua Bio Medicine |
Guangxi Wuzhou and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangxi Wuzhou and Nanhua Bio
The main advantage of trading using opposite Guangxi Wuzhou and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangxi Wuzhou position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.| Guangxi Wuzhou vs. Hubei Geoway Investment | Guangxi Wuzhou vs. Juneyao Airlines | Guangxi Wuzhou vs. Beijing Mainstreets Investment | Guangxi Wuzhou vs. Henan Shuanghui Investment |
| Nanhua Bio vs. Haima Automobile Group | Nanhua Bio vs. Hangzhou Arcvideo Technology | Nanhua Bio vs. Fujian Anjoy Foods | Nanhua Bio vs. Xiangyang Automobile Bearing |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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