Correlation Between Changjiang Publishing and Guangzhou Shiyuan
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By analyzing existing cross correlation between Changjiang Publishing Media and Guangzhou Shiyuan Electronic, you can compare the effects of market volatilities on Changjiang Publishing and Guangzhou Shiyuan 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 Publishing with a short position of Guangzhou Shiyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Publishing and Guangzhou Shiyuan.
Diversification Opportunities for Changjiang Publishing and Guangzhou Shiyuan
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Changjiang and Guangzhou is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Publishing Media and Guangzhou Shiyuan Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Shiyuan and Changjiang Publishing 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 Publishing Media are associated (or correlated) with Guangzhou Shiyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Shiyuan has no effect on the direction of Changjiang Publishing i.e., Changjiang Publishing and Guangzhou Shiyuan go up and down completely randomly.
Pair Corralation between Changjiang Publishing and Guangzhou Shiyuan
Assuming the 90 days trading horizon Changjiang Publishing Media is expected to generate 0.73 times more return on investment than Guangzhou Shiyuan. However, Changjiang Publishing Media is 1.37 times less risky than Guangzhou Shiyuan. It trades about 0.11 of its potential returns per unit of risk. Guangzhou Shiyuan Electronic is currently generating about 0.06 per unit of risk. If you would invest 875.00 in Changjiang Publishing Media on September 12, 2024 and sell it today you would earn a total of 47.00 from holding Changjiang Publishing Media or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changjiang Publishing Media vs. Guangzhou Shiyuan Electronic
Performance |
| Timeline |
| Changjiang Publishing |
| Guangzhou Shiyuan |
Changjiang Publishing and Guangzhou Shiyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changjiang Publishing and Guangzhou Shiyuan
The main advantage of trading using opposite Changjiang Publishing and Guangzhou Shiyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Publishing position performs unexpectedly, Guangzhou Shiyuan 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 Shiyuan will offset losses from the drop in Guangzhou Shiyuan's long position.The idea behind Changjiang Publishing Media and Guangzhou Shiyuan Electronic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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