Correlation Between Mengtian Home and Guosheng Financial
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By analyzing existing cross correlation between Mengtian Home Group and Guosheng Financial Holding, you can compare the effects of market volatilities on Mengtian Home and Guosheng Financial 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 Mengtian Home with a short position of Guosheng Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mengtian Home and Guosheng Financial.
Diversification Opportunities for Mengtian Home and Guosheng Financial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mengtian and Guosheng is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mengtian Home Group and Guosheng Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guosheng Financial and Mengtian Home 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 Mengtian Home Group are associated (or correlated) with Guosheng Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guosheng Financial has no effect on the direction of Mengtian Home i.e., Mengtian Home and Guosheng Financial go up and down completely randomly.
Pair Corralation between Mengtian Home and Guosheng Financial
Assuming the 90 days trading horizon Mengtian Home is expected to generate 1.08 times less return on investment than Guosheng Financial. But when comparing it to its historical volatility, Mengtian Home Group is 1.24 times less risky than Guosheng Financial. It trades about 0.07 of its potential returns per unit of risk. Guosheng Financial Holding is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 937.00 in Guosheng Financial Holding on November 3, 2024 and sell it today you would earn a total of 403.00 from holding Guosheng Financial Holding or generate 43.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mengtian Home Group vs. Guosheng Financial Holding
Performance |
| Timeline |
| Mengtian Home Group |
| Guosheng Financial |
Mengtian Home and Guosheng Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mengtian Home and Guosheng Financial
The main advantage of trading using opposite Mengtian Home and Guosheng Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mengtian Home position performs unexpectedly, Guosheng Financial 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 Guosheng Financial will offset losses from the drop in Guosheng Financial's long position.| Mengtian Home vs. Xinxiang Chemical Fiber | Mengtian Home vs. Lier Chemical Co | Mengtian Home vs. Zijin Mining Group | Mengtian Home vs. Western Metal Materials |
| Guosheng Financial vs. Henan Shuanghui Investment | Guosheng Financial vs. Kangping Technology Co | Guosheng Financial vs. Linewell Software Co | Guosheng Financial vs. Kuang Chi Technologies |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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