Correlation Between Liaoning Dingjide and Guangzhou Jointas
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By analyzing existing cross correlation between Liaoning Dingjide Petrochemical and Guangzhou Jointas Chemical, you can compare the effects of market volatilities on Liaoning Dingjide and Guangzhou Jointas 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 Liaoning Dingjide with a short position of Guangzhou Jointas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Dingjide and Guangzhou Jointas.
Diversification Opportunities for Liaoning Dingjide and Guangzhou Jointas
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liaoning and Guangzhou is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Dingjide Petrochemica and Guangzhou Jointas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jointas and Liaoning Dingjide 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 Liaoning Dingjide Petrochemical are associated (or correlated) with Guangzhou Jointas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jointas has no effect on the direction of Liaoning Dingjide i.e., Liaoning Dingjide and Guangzhou Jointas go up and down completely randomly.
Pair Corralation between Liaoning Dingjide and Guangzhou Jointas
Assuming the 90 days trading horizon Liaoning Dingjide Petrochemical is expected to generate 1.19 times more return on investment than Guangzhou Jointas. However, Liaoning Dingjide is 1.19 times more volatile than Guangzhou Jointas Chemical. It trades about -0.11 of its potential returns per unit of risk. Guangzhou Jointas Chemical is currently generating about -0.17 per unit of risk. If you would invest 3,391 in Liaoning Dingjide Petrochemical on October 17, 2024 and sell it today you would lose (362.00) from holding Liaoning Dingjide Petrochemical or give up 10.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Dingjide Petrochemica vs. Guangzhou Jointas Chemical
Performance |
| Timeline |
| Liaoning Dingjide |
| Guangzhou Jointas |
Liaoning Dingjide and Guangzhou Jointas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Dingjide and Guangzhou Jointas
The main advantage of trading using opposite Liaoning Dingjide and Guangzhou Jointas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Dingjide position performs unexpectedly, Guangzhou Jointas 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 Jointas will offset losses from the drop in Guangzhou Jointas' long position.| Liaoning Dingjide vs. Beijing Yanjing Brewery | Liaoning Dingjide vs. Haima Automobile Group | Liaoning Dingjide vs. Suzhou Oriental Semiconductor | Liaoning Dingjide vs. Guangzhou Haige Communications |
| Guangzhou Jointas vs. Zijin Mining Group | Guangzhou Jointas vs. Wanhua Chemical Group | Guangzhou Jointas vs. Baoshan Iron Steel | Guangzhou Jointas vs. Shandong Gold Mining |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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