Correlation Between Dongxing Sec and Guosheng Financial
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By analyzing existing cross correlation between Dongxing Sec Co and Guosheng Financial Holding, you can compare the effects of market volatilities on Dongxing Sec and Guosheng Financial 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 Dongxing Sec with a short position of Guosheng Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongxing Sec and Guosheng Financial.
Diversification Opportunities for Dongxing Sec and Guosheng Financial
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongxing and Guosheng is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dongxing Sec Co and Guosheng Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guosheng Financial and Dongxing Sec 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 Dongxing Sec Co are associated (or correlated) with Guosheng Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guosheng Financial has no effect on the direction of Dongxing Sec i.e., Dongxing Sec and Guosheng Financial go up and down completely randomly.
Pair Corralation between Dongxing Sec and Guosheng Financial
Assuming the 90 days trading horizon Dongxing Sec is expected to generate 1.89 times less return on investment than Guosheng Financial. But when comparing it to its historical volatility, Dongxing Sec Co is 1.39 times less risky than Guosheng Financial. It trades about 0.07 of its potential returns per unit of risk. Guosheng Financial Holding is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 915.00 in Guosheng Financial Holding on September 14, 2024 and sell it today you would earn a total of 825.00 from holding Guosheng Financial Holding or generate 90.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongxing Sec Co vs. Guosheng Financial Holding
Performance |
| Timeline |
| Dongxing Sec |
| Guosheng Financial |
Dongxing Sec and Guosheng Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongxing Sec and Guosheng Financial
The main advantage of trading using opposite Dongxing Sec and Guosheng Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongxing Sec position performs unexpectedly, Guosheng Financial 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 Guosheng Financial will offset losses from the drop in Guosheng Financial's long position.| Dongxing Sec vs. Shanghai CEO Environmental | Dongxing Sec vs. Juewei Food Co | Dongxing Sec vs. Innovative Medical Management | Dongxing Sec vs. Huaxia Fund Management |
| Guosheng Financial vs. Leyard Optoelectronic | Guosheng Financial vs. Juneyao Airlines | Guosheng Financial vs. Xinya Electronic Co | Guosheng Financial vs. Epoxy Base Electronic |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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