Correlation Between Guangzhou Restaurants and Niutech Environment
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By analyzing existing cross correlation between Guangzhou Restaurants Group and Niutech Environment Technology, you can compare the effects of market volatilities on Guangzhou Restaurants and Niutech Environment 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 Niutech Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Restaurants and Niutech Environment.
Diversification Opportunities for Guangzhou Restaurants and Niutech Environment
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Niutech is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Restaurants Group and Niutech Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niutech Environment 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 Niutech Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niutech Environment has no effect on the direction of Guangzhou Restaurants i.e., Guangzhou Restaurants and Niutech Environment go up and down completely randomly.
Pair Corralation between Guangzhou Restaurants and Niutech Environment
Assuming the 90 days trading horizon Guangzhou Restaurants Group is expected to under-perform the Niutech Environment. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Restaurants Group is 1.77 times less risky than Niutech Environment. The stock trades about -0.07 of its potential returns per unit of risk. The Niutech Environment Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,329 in Niutech Environment Technology on August 30, 2024 and sell it today you would earn a total of 101.00 from holding Niutech Environment Technology or generate 7.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Restaurants Group vs. Niutech Environment Technology
Performance |
| Timeline |
| Guangzhou Restaurants |
| Niutech Environment |
Guangzhou Restaurants and Niutech Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Restaurants and Niutech Environment
The main advantage of trading using opposite Guangzhou Restaurants and Niutech Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Restaurants position performs unexpectedly, Niutech Environment 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 Niutech Environment will offset losses from the drop in Niutech Environment's long position.| Guangzhou Restaurants vs. China Petroleum Chemical | Guangzhou Restaurants vs. PetroChina Co Ltd | Guangzhou Restaurants vs. China State Construction | Guangzhou Restaurants vs. China Railway 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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