Correlation Between Guangzhou Restaurants and Industrial
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By analyzing existing cross correlation between Guangzhou Restaurants Group and Industrial and Commercial, you can compare the effects of market volatilities on Guangzhou Restaurants and Industrial 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Restaurants and Industrial.
Diversification Opportunities for Guangzhou Restaurants and Industrial
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Industrial is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Restaurants Group and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of Guangzhou Restaurants i.e., Guangzhou Restaurants and Industrial go up and down completely randomly.
Pair Corralation between Guangzhou Restaurants and Industrial
Assuming the 90 days trading horizon Guangzhou Restaurants Group is expected to generate 2.08 times more return on investment than Industrial. However, Guangzhou Restaurants is 2.08 times more volatile than Industrial and Commercial. It trades about 0.2 of its potential returns per unit of risk. Industrial and Commercial is currently generating about 0.24 per unit of risk. If you would invest 1,642 in Guangzhou Restaurants Group on September 15, 2024 and sell it today you would earn a total of 149.00 from holding Guangzhou Restaurants Group or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Restaurants Group vs. Industrial and Commercial
Performance |
| Timeline |
| Guangzhou Restaurants |
| Industrial and Commercial |
Guangzhou Restaurants and Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Restaurants and Industrial
The main advantage of trading using opposite Guangzhou Restaurants and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Restaurants position performs unexpectedly, Industrial 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 Industrial will offset losses from the drop in Industrial's long position.| Guangzhou Restaurants vs. Kweichow Moutai Co | Guangzhou Restaurants vs. Shenzhen Mindray Bio Medical | Guangzhou Restaurants vs. Jiangsu Pacific Quartz | Guangzhou Restaurants vs. G bits Network Technology |
| Industrial vs. Jiangsu Jinling Sports | Industrial vs. Cofco Biochemical Anhui | Industrial vs. China Sports Industry | Industrial vs. Guangzhou Restaurants 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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