Correlation Between Shanghai Material and Guangdong Qunxing
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By analyzing existing cross correlation between Shanghai Material Trading and Guangdong Qunxing Toys, you can compare the effects of market volatilities on Shanghai Material and Guangdong Qunxing 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 Shanghai Material with a short position of Guangdong Qunxing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Material and Guangdong Qunxing.
Diversification Opportunities for Shanghai Material and Guangdong Qunxing
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shanghai and Guangdong is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Material Trading and Guangdong Qunxing Toys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Qunxing Toys and Shanghai Material 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 Shanghai Material Trading are associated (or correlated) with Guangdong Qunxing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Qunxing Toys has no effect on the direction of Shanghai Material i.e., Shanghai Material and Guangdong Qunxing go up and down completely randomly.
Pair Corralation between Shanghai Material and Guangdong Qunxing
Assuming the 90 days trading horizon Shanghai Material Trading is expected to under-perform the Guangdong Qunxing. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Material Trading is 1.39 times less risky than Guangdong Qunxing. The stock trades about -0.18 of its potential returns per unit of risk. The Guangdong Qunxing Toys is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 724.00 in Guangdong Qunxing Toys on October 18, 2024 and sell it today you would lose (19.00) from holding Guangdong Qunxing Toys or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Material Trading vs. Guangdong Qunxing Toys
Performance |
| Timeline |
| Shanghai Material Trading |
| Guangdong Qunxing Toys |
Shanghai Material and Guangdong Qunxing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Material and Guangdong Qunxing
The main advantage of trading using opposite Shanghai Material and Guangdong Qunxing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Material position performs unexpectedly, Guangdong Qunxing 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 Qunxing will offset losses from the drop in Guangdong Qunxing's long position.| Shanghai Material vs. Industrial and Commercial | Shanghai Material vs. Agricultural Bank of | Shanghai Material vs. China Construction Bank | Shanghai Material vs. Bank of China |
| Guangdong Qunxing vs. Tieling Newcity Investment | Guangdong Qunxing vs. Ningbo Fangzheng Automobile | Guangdong Qunxing vs. China Mobile Limited | Guangdong Qunxing vs. Shanghai Material Trading |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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