Correlation Between China International and Guangzhou KingTeller
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By analyzing existing cross correlation between China International Capital and Guangzhou KingTeller Technology, you can compare the effects of market volatilities on China International and Guangzhou KingTeller 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 International with a short position of Guangzhou KingTeller. Check out your portfolio center. Please also check ongoing floating volatility patterns of China International and Guangzhou KingTeller.
Diversification Opportunities for China International and Guangzhou KingTeller
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Guangzhou is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding China International Capital and Guangzhou KingTeller Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou KingTeller and China International 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 International Capital are associated (or correlated) with Guangzhou KingTeller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou KingTeller has no effect on the direction of China International i.e., China International and Guangzhou KingTeller go up and down completely randomly.
Pair Corralation between China International and Guangzhou KingTeller
Assuming the 90 days trading horizon China International is expected to generate 73.89 times less return on investment than Guangzhou KingTeller. But when comparing it to its historical volatility, China International Capital is 1.47 times less risky than Guangzhou KingTeller. It trades about 0.0 of its potential returns per unit of risk. Guangzhou KingTeller Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 335.00 in Guangzhou KingTeller Technology on August 27, 2024 and sell it today you would earn a total of 145.00 from holding Guangzhou KingTeller Technology or generate 43.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China International Capital vs. Guangzhou KingTeller Technolog
Performance |
| Timeline |
| China International |
| Guangzhou KingTeller |
China International and Guangzhou KingTeller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China International and Guangzhou KingTeller
The main advantage of trading using opposite China International and Guangzhou KingTeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China International position performs unexpectedly, Guangzhou KingTeller 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 Guangzhou KingTeller will offset losses from the drop in Guangzhou KingTeller's long position.The idea behind China International Capital and Guangzhou KingTeller Technology 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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