Correlation Between Guangzhou Restaurants and ADAMA
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By analyzing existing cross correlation between Guangzhou Restaurants Group and ADAMA, you can compare the effects of market volatilities on Guangzhou Restaurants and ADAMA 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 Guangzhou Restaurants with a short position of ADAMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Restaurants and ADAMA.
Diversification Opportunities for Guangzhou Restaurants and ADAMA
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and ADAMA is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Restaurants Group and ADAMA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADAMA and Guangzhou Restaurants 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 Guangzhou Restaurants Group are associated (or correlated) with ADAMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADAMA has no effect on the direction of Guangzhou Restaurants i.e., Guangzhou Restaurants and ADAMA go up and down completely randomly.
Pair Corralation between Guangzhou Restaurants and ADAMA
Assuming the 90 days trading horizon Guangzhou Restaurants Group is expected to under-perform the ADAMA. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Restaurants Group is 1.21 times less risky than ADAMA. The stock trades about -0.04 of its potential returns per unit of risk. The ADAMA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 909.00 in ADAMA on September 12, 2024 and sell it today you would lose (226.00) from holding ADAMA or give up 24.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Restaurants Group vs. ADAMA
Performance |
| Timeline |
| Guangzhou Restaurants |
| ADAMA |
Guangzhou Restaurants and ADAMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Restaurants and ADAMA
The main advantage of trading using opposite Guangzhou Restaurants and ADAMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Restaurants position performs unexpectedly, ADAMA 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 ADAMA will offset losses from the drop in ADAMA's long position.| Guangzhou Restaurants vs. Lutian Machinery Co | Guangzhou Restaurants vs. PetroChina Co Ltd | Guangzhou Restaurants vs. Bank of China | Guangzhou Restaurants vs. Gansu Jiu Steel |
| ADAMA vs. Will Semiconductor Co | ADAMA vs. Guangzhou Restaurants Group | ADAMA vs. Anhui Transport Consulting | ADAMA vs. Nexchip Semiconductor Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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