Correlation Between Guangxi Wuzhou and Eastroc Beverage
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By analyzing existing cross correlation between Guangxi Wuzhou Communications and Eastroc Beverage Group, you can compare the effects of market volatilities on Guangxi Wuzhou and Eastroc Beverage 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 Eastroc Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangxi Wuzhou and Eastroc Beverage.
Diversification Opportunities for Guangxi Wuzhou and Eastroc Beverage
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangxi and Eastroc is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Guangxi Wuzhou Communications and Eastroc Beverage Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastroc Beverage 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 Eastroc Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastroc Beverage has no effect on the direction of Guangxi Wuzhou i.e., Guangxi Wuzhou and Eastroc Beverage go up and down completely randomly.
Pair Corralation between Guangxi Wuzhou and Eastroc Beverage
Assuming the 90 days trading horizon Guangxi Wuzhou is expected to generate 1.98 times less return on investment than Eastroc Beverage. In addition to that, Guangxi Wuzhou is 1.16 times more volatile than Eastroc Beverage Group. It trades about 0.03 of its total potential returns per unit of risk. Eastroc Beverage Group is currently generating about 0.07 per unit of volatility. If you would invest 12,924 in Eastroc Beverage Group on October 29, 2024 and sell it today you would earn a total of 11,189 from holding Eastroc Beverage Group or generate 86.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangxi Wuzhou Communications vs. Eastroc Beverage Group
Performance |
| Timeline |
| Guangxi Wuzhou Commu |
| Eastroc Beverage |
Guangxi Wuzhou and Eastroc Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangxi Wuzhou and Eastroc Beverage
The main advantage of trading using opposite Guangxi Wuzhou and Eastroc Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangxi Wuzhou position performs unexpectedly, Eastroc Beverage 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 Eastroc Beverage will offset losses from the drop in Eastroc Beverage'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 |
| Eastroc Beverage vs. Agricultural Bank of | Eastroc Beverage vs. Industrial and Commercial | Eastroc Beverage vs. Bank of China | Eastroc Beverage vs. China Construction Bank |
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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