Correlation Between China Building and Guangzhou KingTeller
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By analyzing existing cross correlation between China Building Material and Guangzhou KingTeller Technology, you can compare the effects of market volatilities on China Building and Guangzhou KingTeller 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 China Building with a short position of Guangzhou KingTeller. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Building and Guangzhou KingTeller.
Diversification Opportunities for China Building and Guangzhou KingTeller
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Guangzhou is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding China Building Material and Guangzhou KingTeller Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou KingTeller and China Building 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 China Building Material are associated (or correlated) with Guangzhou KingTeller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou KingTeller has no effect on the direction of China Building i.e., China Building and Guangzhou KingTeller go up and down completely randomly.
Pair Corralation between China Building and Guangzhou KingTeller
Assuming the 90 days trading horizon China Building Material is expected to under-perform the Guangzhou KingTeller. But the stock apears to be less risky and, when comparing its historical volatility, China Building Material is 1.58 times less risky than Guangzhou KingTeller. The stock trades about -0.03 of its potential returns per unit of risk. The Guangzhou KingTeller Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Guangzhou KingTeller Technology on November 2, 2024 and sell it today you would earn a total of 128.00 from holding Guangzhou KingTeller Technology or generate 38.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Building Material vs. Guangzhou KingTeller Technolog
Performance |
| Timeline |
| China Building Material |
| Guangzhou KingTeller |
China Building and Guangzhou KingTeller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Building and Guangzhou KingTeller
The main advantage of trading using opposite China Building and Guangzhou KingTeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Building position performs unexpectedly, Guangzhou KingTeller 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 KingTeller will offset losses from the drop in Guangzhou KingTeller's long position.| China Building vs. MayAir Technology Co | China Building vs. Qifeng New Material | China Building vs. Qingdao Haier Biomedical | China Building vs. Winner Medical Co |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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