Correlation Between Caihong Display and Guangzhou Hongli
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By analyzing existing cross correlation between Caihong Display Devices and Guangzhou Hongli Opto, you can compare the effects of market volatilities on Caihong Display and Guangzhou Hongli 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 Caihong Display with a short position of Guangzhou Hongli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Guangzhou Hongli.
Diversification Opportunities for Caihong Display and Guangzhou Hongli
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Caihong and Guangzhou is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Guangzhou Hongli Opto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Hongli Opto and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Guangzhou Hongli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Hongli Opto has no effect on the direction of Caihong Display i.e., Caihong Display and Guangzhou Hongli go up and down completely randomly.
Pair Corralation between Caihong Display and Guangzhou Hongli
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 0.82 times more return on investment than Guangzhou Hongli. However, Caihong Display Devices is 1.22 times less risky than Guangzhou Hongli. It trades about 0.05 of its potential returns per unit of risk. Guangzhou Hongli Opto is currently generating about 0.02 per unit of risk. If you would invest 590.00 in Caihong Display Devices on October 16, 2024 and sell it today you would earn a total of 237.00 from holding Caihong Display Devices or generate 40.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Guangzhou Hongli Opto
Performance |
| Timeline |
| Caihong Display Devices |
| Guangzhou Hongli Opto |
Caihong Display and Guangzhou Hongli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Guangzhou Hongli
The main advantage of trading using opposite Caihong Display and Guangzhou Hongli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Guangzhou Hongli 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 Hongli will offset losses from the drop in Guangzhou Hongli's long position.| Caihong Display vs. Great Sun Foods Co | Caihong Display vs. Vanfund Urban Investment | Caihong Display vs. Zhongrun Resources Investment | Caihong Display vs. Kunwu Jiuding Investment |
| Guangzhou Hongli vs. Montage Technology Co | Guangzhou Hongli vs. Bangyan Technology Co | Guangzhou Hongli vs. Shuhua Sports Co | Guangzhou Hongli vs. Caihong Display Devices |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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