Correlation Between Guangzhou Restaurants and Kidswant Children
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By analyzing existing cross correlation between Guangzhou Restaurants Group and Kidswant Children Products, you can compare the effects of market volatilities on Guangzhou Restaurants and Kidswant Children 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 Kidswant Children. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Restaurants and Kidswant Children.
Diversification Opportunities for Guangzhou Restaurants and Kidswant Children
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guangzhou and Kidswant is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Restaurants Group and Kidswant Children Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kidswant Children 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 Kidswant Children. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kidswant Children has no effect on the direction of Guangzhou Restaurants i.e., Guangzhou Restaurants and Kidswant Children go up and down completely randomly.
Pair Corralation between Guangzhou Restaurants and Kidswant Children
Assuming the 90 days trading horizon Guangzhou Restaurants Group is expected to under-perform the Kidswant Children. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Restaurants Group is 2.09 times less risky than Kidswant Children. The stock trades about -0.06 of its potential returns per unit of risk. The Kidswant Children Products is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,353 in Kidswant Children Products on October 30, 2024 and sell it today you would lose (72.00) from holding Kidswant Children Products or give up 5.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Restaurants Group vs. Kidswant Children Products
Performance |
| Timeline |
| Guangzhou Restaurants |
| Kidswant Children |
Guangzhou Restaurants and Kidswant Children Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Restaurants and Kidswant Children
The main advantage of trading using opposite Guangzhou Restaurants and Kidswant Children positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Restaurants position performs unexpectedly, Kidswant Children 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 Kidswant Children will offset losses from the drop in Kidswant Children's long position.| Guangzhou Restaurants vs. Huizhou Speed Wireless | Guangzhou Restaurants vs. Grandblue Environment Co | Guangzhou Restaurants vs. Panda Financial Holding | Guangzhou Restaurants vs. Beijing Kingsoft Office |
| Kidswant Children vs. Shandong Longquan Pipeline | Kidswant Children vs. Shenyang Blue Silver | Kidswant Children vs. Hainan Mining Co | Kidswant Children vs. Nanning Chemical Industry |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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