Correlation Between China State and Guangdong Shenglu
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By analyzing existing cross correlation between China State Construction and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on China State and Guangdong Shenglu 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 China State with a short position of Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Guangdong Shenglu.
Diversification Opportunities for China State and Guangdong Shenglu
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Guangdong is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu and China State 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 China State Construction are associated (or correlated) with Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of China State i.e., China State and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between China State and Guangdong Shenglu
Assuming the 90 days trading horizon China State Construction is expected to under-perform the Guangdong Shenglu. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 1.85 times less risky than Guangdong Shenglu. The stock trades about -0.11 of its potential returns per unit of risk. The Guangdong Shenglu Telecommunication is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Guangdong Shenglu Telecommunication on November 27, 2024 and sell it today you would earn a total of 63.00 from holding Guangdong Shenglu Telecommunication or generate 10.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Guangdong Shenglu Telecommunic
Performance |
| Timeline |
| China State Construction |
| Guangdong Shenglu |
China State and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Guangdong Shenglu
The main advantage of trading using opposite China State and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Guangdong Shenglu 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 Shenglu will offset losses from the drop in Guangdong Shenglu's long position.| China State vs. TianJin 712 Communication | China State vs. INKON Life Technology | China State vs. Juneyao Airlines | China State vs. Elec Tech International Co |
| Guangdong Shenglu vs. Harbin Hatou Investment | Guangdong Shenglu vs. Hubei Geoway Investment | Guangdong Shenglu vs. CICT Mobile Communication | Guangdong Shenglu vs. SSAW Hotels Resorts |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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