Correlation Between Sichuan Teway and Guangdong Advertising
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By analyzing existing cross correlation between Sichuan Teway Food and Guangdong Advertising Co, you can compare the effects of market volatilities on Sichuan Teway and Guangdong Advertising 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 Sichuan Teway with a short position of Guangdong Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Teway and Guangdong Advertising.
Diversification Opportunities for Sichuan Teway and Guangdong Advertising
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Guangdong is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Teway Food and Guangdong Advertising Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Advertising and Sichuan Teway 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 Sichuan Teway Food are associated (or correlated) with Guangdong Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Advertising has no effect on the direction of Sichuan Teway i.e., Sichuan Teway and Guangdong Advertising go up and down completely randomly.
Pair Corralation between Sichuan Teway and Guangdong Advertising
Assuming the 90 days trading horizon Sichuan Teway Food is expected to under-perform the Guangdong Advertising. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Teway Food is 1.58 times less risky than Guangdong Advertising. The stock trades about -0.03 of its potential returns per unit of risk. The Guangdong Advertising Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 433.00 in Guangdong Advertising Co on August 31, 2024 and sell it today you would earn a total of 345.00 from holding Guangdong Advertising Co or generate 79.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Teway Food vs. Guangdong Advertising Co
Performance |
| Timeline |
| Sichuan Teway Food |
| Guangdong Advertising |
Sichuan Teway and Guangdong Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Teway and Guangdong Advertising
The main advantage of trading using opposite Sichuan Teway and Guangdong Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Teway position performs unexpectedly, Guangdong Advertising 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 Guangdong Advertising will offset losses from the drop in Guangdong Advertising's long position.| Sichuan Teway vs. Lutian Machinery Co | Sichuan Teway vs. PetroChina Co Ltd | Sichuan Teway vs. Bank of China | Sichuan Teway vs. Gansu Jiu Steel |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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