Correlation Between Fujian Oriental and Guoguang Electric
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By analyzing existing cross correlation between Fujian Oriental Silver and Guoguang Electric Co, you can compare the effects of market volatilities on Fujian Oriental and Guoguang Electric 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 Fujian Oriental with a short position of Guoguang Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Oriental and Guoguang Electric.
Diversification Opportunities for Fujian Oriental and Guoguang Electric
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Guoguang is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Oriental Silver and Guoguang Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guoguang Electric and Fujian Oriental 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 Fujian Oriental Silver are associated (or correlated) with Guoguang Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guoguang Electric has no effect on the direction of Fujian Oriental i.e., Fujian Oriental and Guoguang Electric go up and down completely randomly.
Pair Corralation between Fujian Oriental and Guoguang Electric
Assuming the 90 days trading horizon Fujian Oriental Silver is expected to generate 0.78 times more return on investment than Guoguang Electric. However, Fujian Oriental Silver is 1.28 times less risky than Guoguang Electric. It trades about 0.03 of its potential returns per unit of risk. Guoguang Electric Co is currently generating about -0.16 per unit of risk. If you would invest 767.00 in Fujian Oriental Silver on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Fujian Oriental Silver or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fujian Oriental Silver vs. Guoguang Electric Co
Performance |
| Timeline |
| Fujian Oriental Silver |
| Guoguang Electric |
Fujian Oriental and Guoguang Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Oriental and Guoguang Electric
The main advantage of trading using opposite Fujian Oriental and Guoguang Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Oriental position performs unexpectedly, Guoguang Electric 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 Guoguang Electric will offset losses from the drop in Guoguang Electric's long position.| Fujian Oriental vs. Guangdong Jingyi Metal | Fujian Oriental vs. Bomin Electronics Co | Fujian Oriental vs. Xinjiang Baodi Mining | Fujian Oriental vs. Dongguan Tarry Electronics |
| Guoguang Electric vs. Huafa Industrial Co | Guoguang Electric vs. By health | Guoguang Electric vs. Tibet Huayu Mining | Guoguang Electric vs. Hainan Mining Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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