Correlation Between Bank of Changsha and Gan Yuan
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By analyzing existing cross correlation between Bank of Changsha and Gan Yuan Foods, you can compare the effects of market volatilities on Bank of Changsha and Gan Yuan 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 Bank of Changsha with a short position of Gan Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Changsha and Gan Yuan.
Diversification Opportunities for Bank of Changsha and Gan Yuan
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Gan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Changsha and Gan Yuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Yuan Foods and Bank of Changsha 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 Bank of Changsha are associated (or correlated) with Gan Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Yuan Foods has no effect on the direction of Bank of Changsha i.e., Bank of Changsha and Gan Yuan go up and down completely randomly.
Pair Corralation between Bank of Changsha and Gan Yuan
Assuming the 90 days trading horizon Bank of Changsha is expected to generate 3.35 times less return on investment than Gan Yuan. But when comparing it to its historical volatility, Bank of Changsha is 1.49 times less risky than Gan Yuan. It trades about 0.1 of its potential returns per unit of risk. Gan Yuan Foods is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 7,392 in Gan Yuan Foods on September 12, 2024 and sell it today you would earn a total of 801.00 from holding Gan Yuan Foods or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Changsha vs. Gan Yuan Foods
Performance |
| Timeline |
| Bank of Changsha |
| Gan Yuan Foods |
Bank of Changsha and Gan Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Changsha and Gan Yuan
The main advantage of trading using opposite Bank of Changsha and Gan Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Changsha position performs unexpectedly, Gan Yuan 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 Gan Yuan will offset losses from the drop in Gan Yuan's long position.| Bank of Changsha vs. Panda Dairy Corp | Bank of Changsha vs. State Grid InformationCommunication | Bank of Changsha vs. Suzhou Weizhixiang Food | Bank of Changsha vs. Zhongyin Babi Food |
| Gan Yuan vs. Maxvision Technology Corp | Gan Yuan vs. Eastroc Beverage Group | Gan Yuan vs. Changchun Faway Automobile | Gan Yuan vs. ROPEOK Technology Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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