Correlation Between Changjiang Jinggong and Guangzhou KDT
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By analyzing existing cross correlation between Changjiang Jinggong Steel and Guangzhou KDT Machinery, you can compare the effects of market volatilities on Changjiang Jinggong and Guangzhou KDT 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 Changjiang Jinggong with a short position of Guangzhou KDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Jinggong and Guangzhou KDT.
Diversification Opportunities for Changjiang Jinggong and Guangzhou KDT
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changjiang and Guangzhou is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Jinggong Steel and Guangzhou KDT Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou KDT Machinery and Changjiang Jinggong 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 Changjiang Jinggong Steel are associated (or correlated) with Guangzhou KDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou KDT Machinery has no effect on the direction of Changjiang Jinggong i.e., Changjiang Jinggong and Guangzhou KDT go up and down completely randomly.
Pair Corralation between Changjiang Jinggong and Guangzhou KDT
Assuming the 90 days trading horizon Changjiang Jinggong Steel is expected to under-perform the Guangzhou KDT. But the stock apears to be less risky and, when comparing its historical volatility, Changjiang Jinggong Steel is 1.01 times less risky than Guangzhou KDT. The stock trades about -0.52 of its potential returns per unit of risk. The Guangzhou KDT Machinery is currently generating about -0.47 of returns per unit of risk over similar time horizon. If you would invest 1,886 in Guangzhou KDT Machinery on October 12, 2024 and sell it today you would lose (265.00) from holding Guangzhou KDT Machinery or give up 14.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changjiang Jinggong Steel vs. Guangzhou KDT Machinery
Performance |
| Timeline |
| Changjiang Jinggong Steel |
| Guangzhou KDT Machinery |
Changjiang Jinggong and Guangzhou KDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changjiang Jinggong and Guangzhou KDT
The main advantage of trading using opposite Changjiang Jinggong and Guangzhou KDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Jinggong position performs unexpectedly, Guangzhou KDT 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 KDT will offset losses from the drop in Guangzhou KDT's long position.| Changjiang Jinggong vs. Servyou Software Group | Changjiang Jinggong vs. Easyhome New Retail | Changjiang Jinggong vs. Shandong Rike Chemical | Changjiang Jinggong vs. Xilong Chemical Co |
| Guangzhou KDT vs. Elite Color Environmental | Guangzhou KDT vs. Central Plains Environment | Guangzhou KDT vs. Changjiang Jinggong Steel | Guangzhou KDT vs. Hangzhou Guotai Environmental |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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