Correlation Between Zhangjiagang Freetrade and Guangdong Brandmax
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By analyzing existing cross correlation between Zhangjiagang Freetrade Science and Guangdong Brandmax Marketing, you can compare the effects of market volatilities on Zhangjiagang Freetrade and Guangdong Brandmax 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 Zhangjiagang Freetrade with a short position of Guangdong Brandmax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhangjiagang Freetrade and Guangdong Brandmax.
Diversification Opportunities for Zhangjiagang Freetrade and Guangdong Brandmax
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Zhangjiagang and Guangdong is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Zhangjiagang Freetrade Science and Guangdong Brandmax Marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Brandmax and Zhangjiagang Freetrade 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 Zhangjiagang Freetrade Science are associated (or correlated) with Guangdong Brandmax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Brandmax has no effect on the direction of Zhangjiagang Freetrade i.e., Zhangjiagang Freetrade and Guangdong Brandmax go up and down completely randomly.
Pair Corralation between Zhangjiagang Freetrade and Guangdong Brandmax
Assuming the 90 days trading horizon Zhangjiagang Freetrade Science is expected to generate 0.8 times more return on investment than Guangdong Brandmax. However, Zhangjiagang Freetrade Science is 1.24 times less risky than Guangdong Brandmax. It trades about 0.12 of its potential returns per unit of risk. Guangdong Brandmax Marketing is currently generating about 0.09 per unit of risk. If you would invest 349.00 in Zhangjiagang Freetrade Science on August 28, 2024 and sell it today you would earn a total of 26.00 from holding Zhangjiagang Freetrade Science or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhangjiagang Freetrade Science vs. Guangdong Brandmax Marketing
Performance |
| Timeline |
| Zhangjiagang Freetrade |
| Guangdong Brandmax |
Zhangjiagang Freetrade and Guangdong Brandmax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhangjiagang Freetrade and Guangdong Brandmax
The main advantage of trading using opposite Zhangjiagang Freetrade and Guangdong Brandmax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhangjiagang Freetrade position performs unexpectedly, Guangdong Brandmax 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 Guangdong Brandmax will offset losses from the drop in Guangdong Brandmax's long position.The idea behind Zhangjiagang Freetrade Science and Guangdong Brandmax Marketing 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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