Correlation Between Guangxi Wuzhou and Fuzhou Rockchip
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By analyzing existing cross correlation between Guangxi Wuzhou Communications and Fuzhou Rockchip Electronics, you can compare the effects of market volatilities on Guangxi Wuzhou and Fuzhou Rockchip 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 Fuzhou Rockchip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangxi Wuzhou and Fuzhou Rockchip.
Diversification Opportunities for Guangxi Wuzhou and Fuzhou Rockchip
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangxi and Fuzhou is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Guangxi Wuzhou Communications and Fuzhou Rockchip Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuzhou Rockchip Elec 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 Fuzhou Rockchip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuzhou Rockchip Elec has no effect on the direction of Guangxi Wuzhou i.e., Guangxi Wuzhou and Fuzhou Rockchip go up and down completely randomly.
Pair Corralation between Guangxi Wuzhou and Fuzhou Rockchip
Assuming the 90 days trading horizon Guangxi Wuzhou Communications is expected to under-perform the Fuzhou Rockchip. But the stock apears to be less risky and, when comparing its historical volatility, Guangxi Wuzhou Communications is 2.07 times less risky than Fuzhou Rockchip. The stock trades about -0.18 of its potential returns per unit of risk. The Fuzhou Rockchip Electronics is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 11,595 in Fuzhou Rockchip Electronics on October 29, 2024 and sell it today you would earn a total of 4,131 from holding Fuzhou Rockchip Electronics or generate 35.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Guangxi Wuzhou Communications vs. Fuzhou Rockchip Electronics
Performance |
Timeline |
Guangxi Wuzhou Commu |
Fuzhou Rockchip Elec |
Guangxi Wuzhou and Fuzhou Rockchip Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangxi Wuzhou and Fuzhou Rockchip
The main advantage of trading using opposite Guangxi Wuzhou and Fuzhou Rockchip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangxi Wuzhou position performs unexpectedly, Fuzhou Rockchip 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 Fuzhou Rockchip will offset losses from the drop in Fuzhou Rockchip's long position.Guangxi Wuzhou vs. Cabio Biotech Wuhan | Guangxi Wuzhou vs. Holitech Technology Co | Guangxi Wuzhou vs. Sharetronic Data Technology | Guangxi Wuzhou vs. Lander Sports Development |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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