Correlation Between Shanghai Ziyan and Guangzhou Seagull
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Guangzhou Seagull Kitchen, you can compare the effects of market volatilities on Shanghai Ziyan and Guangzhou Seagull 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 Shanghai Ziyan with a short position of Guangzhou Seagull. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Guangzhou Seagull.
Diversification Opportunities for Shanghai Ziyan and Guangzhou Seagull
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shanghai and Guangzhou is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods and Guangzhou Seagull Kitchen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Seagull Kitchen and Shanghai Ziyan 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 Shanghai Ziyan Foods are associated (or correlated) with Guangzhou Seagull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Seagull Kitchen has no effect on the direction of Shanghai Ziyan i.e., Shanghai Ziyan and Guangzhou Seagull go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Guangzhou Seagull
Assuming the 90 days trading horizon Shanghai Ziyan Foods is expected to under-perform the Guangzhou Seagull. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Ziyan Foods is 2.09 times less risky than Guangzhou Seagull. The stock trades about -0.03 of its potential returns per unit of risk. The Guangzhou Seagull Kitchen is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 266.00 in Guangzhou Seagull Kitchen on November 5, 2024 and sell it today you would earn a total of 19.00 from holding Guangzhou Seagull Kitchen or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Guangzhou Seagull Kitchen
Performance |
| Timeline |
| Shanghai Ziyan Foods |
| Guangzhou Seagull Kitchen |
Shanghai Ziyan and Guangzhou Seagull Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Ziyan and Guangzhou Seagull
The main advantage of trading using opposite Shanghai Ziyan and Guangzhou Seagull positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan position performs unexpectedly, Guangzhou Seagull 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 Seagull will offset losses from the drop in Guangzhou Seagull's long position.| Shanghai Ziyan vs. Ningbo Fangzheng Automobile | Shanghai Ziyan vs. Changchun Engley Automobile | Shanghai Ziyan vs. China National Software | Shanghai Ziyan vs. Linewell Software Co |
| Guangzhou Seagull vs. GuoChuang Software Co | Guangzhou Seagull vs. Servyou Software Group | Guangzhou Seagull vs. Glodon Software Co | Guangzhou Seagull vs. Iat Automobile Technology |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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