Correlation Between Guangxi Wuzhou and HeBei Jinniu
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By analyzing existing cross correlation between Guangxi Wuzhou Communications and HeBei Jinniu Chemical, you can compare the effects of market volatilities on Guangxi Wuzhou and HeBei Jinniu 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 HeBei Jinniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangxi Wuzhou and HeBei Jinniu.
Diversification Opportunities for Guangxi Wuzhou and HeBei Jinniu
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guangxi and HeBei is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Guangxi Wuzhou Communications and HeBei Jinniu Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeBei Jinniu Chemical 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 HeBei Jinniu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeBei Jinniu Chemical has no effect on the direction of Guangxi Wuzhou i.e., Guangxi Wuzhou and HeBei Jinniu go up and down completely randomly.
Pair Corralation between Guangxi Wuzhou and HeBei Jinniu
Assuming the 90 days trading horizon Guangxi Wuzhou Communications is expected to generate 0.93 times more return on investment than HeBei Jinniu. However, Guangxi Wuzhou Communications is 1.07 times less risky than HeBei Jinniu. It trades about 0.04 of its potential returns per unit of risk. HeBei Jinniu Chemical is currently generating about 0.02 per unit of risk. If you would invest 342.00 in Guangxi Wuzhou Communications on October 13, 2024 and sell it today you would earn a total of 115.00 from holding Guangxi Wuzhou Communications or generate 33.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangxi Wuzhou Communications vs. HeBei Jinniu Chemical
Performance |
| Timeline |
| Guangxi Wuzhou Commu |
| HeBei Jinniu Chemical |
Guangxi Wuzhou and HeBei Jinniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangxi Wuzhou and HeBei Jinniu
The main advantage of trading using opposite Guangxi Wuzhou and HeBei Jinniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangxi Wuzhou position performs unexpectedly, HeBei Jinniu 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 HeBei Jinniu will offset losses from the drop in HeBei Jinniu's long position.| Guangxi Wuzhou vs. Guangzhou Automobile Group | Guangxi Wuzhou vs. Sinomach Automobile Co | Guangxi Wuzhou vs. Metro Investment Development | Guangxi Wuzhou vs. Zhejiang Qianjiang Motorcycle |
| HeBei Jinniu vs. Jinhui Liquor Co | HeBei Jinniu vs. Bomesc Offshore Engineering | HeBei Jinniu vs. Anhui Jianghuai Automobile | HeBei Jinniu vs. Guangxi Wuzhou Communications |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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