Correlation Between Guangdong Ellington and Shandong Rike
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By analyzing existing cross correlation between Guangdong Ellington Electronics and Shandong Rike Chemical, you can compare the effects of market volatilities on Guangdong Ellington and Shandong Rike 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 Guangdong Ellington with a short position of Shandong Rike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Ellington and Shandong Rike.
Diversification Opportunities for Guangdong Ellington and Shandong Rike
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangdong and Shandong is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Ellington Electronic and Shandong Rike Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Rike Chemical and Guangdong Ellington 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 Guangdong Ellington Electronics are associated (or correlated) with Shandong Rike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Rike Chemical has no effect on the direction of Guangdong Ellington i.e., Guangdong Ellington and Shandong Rike go up and down completely randomly.
Pair Corralation between Guangdong Ellington and Shandong Rike
Assuming the 90 days trading horizon Guangdong Ellington Electronics is expected to generate 0.88 times more return on investment than Shandong Rike. However, Guangdong Ellington Electronics is 1.13 times less risky than Shandong Rike. It trades about 0.05 of its potential returns per unit of risk. Shandong Rike Chemical is currently generating about 0.01 per unit of risk. If you would invest 975.00 in Guangdong Ellington Electronics on November 8, 2024 and sell it today you would earn a total of 70.00 from holding Guangdong Ellington Electronics or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Ellington Electronic vs. Shandong Rike Chemical
Performance |
| Timeline |
| Guangdong Ellington |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Shandong Rike Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guangdong Ellington and Shandong Rike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Ellington and Shandong Rike
The main advantage of trading using opposite Guangdong Ellington and Shandong Rike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Ellington position performs unexpectedly, Shandong Rike 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 Shandong Rike will offset losses from the drop in Shandong Rike's long position.The idea behind Guangdong Ellington Electronics and Shandong Rike Chemical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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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