Correlation Between Liuzhou Chemical and Guangzhou Jointas
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Guangzhou Jointas Chemical, you can compare the effects of market volatilities on Liuzhou Chemical and Guangzhou Jointas 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 Liuzhou Chemical with a short position of Guangzhou Jointas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Guangzhou Jointas.
Diversification Opportunities for Liuzhou Chemical and Guangzhou Jointas
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liuzhou and Guangzhou is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Guangzhou Jointas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jointas and Liuzhou Chemical 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 Liuzhou Chemical Industry are associated (or correlated) with Guangzhou Jointas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jointas has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and Guangzhou Jointas go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Guangzhou Jointas
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 1.26 times more return on investment than Guangzhou Jointas. However, Liuzhou Chemical is 1.26 times more volatile than Guangzhou Jointas Chemical. It trades about 0.04 of its potential returns per unit of risk. Guangzhou Jointas Chemical is currently generating about -0.17 per unit of risk. If you would invest 333.00 in Liuzhou Chemical Industry on October 17, 2024 and sell it today you would earn a total of 6.00 from holding Liuzhou Chemical Industry or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. Guangzhou Jointas Chemical
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Guangzhou Jointas |
Liuzhou Chemical and Guangzhou Jointas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Guangzhou Jointas
The main advantage of trading using opposite Liuzhou Chemical and Guangzhou Jointas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, Guangzhou Jointas 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 Jointas will offset losses from the drop in Guangzhou Jointas' long position.| Liuzhou Chemical vs. Hunan Investment Group | Liuzhou Chemical vs. Eastroc Beverage Group | Liuzhou Chemical vs. StarPower Semiconductor | Liuzhou Chemical vs. Thinkon Semiconductor Jinzhou |
| Guangzhou Jointas vs. Zijin Mining Group | Guangzhou Jointas vs. Wanhua Chemical Group | Guangzhou Jointas vs. Baoshan Iron Steel | Guangzhou Jointas vs. Shandong Gold Mining |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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