Correlation Between Great Sun and Guocheng Mining
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By analyzing existing cross correlation between Great Sun Foods Co and Guocheng Mining Co, you can compare the effects of market volatilities on Great Sun and Guocheng Mining 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 Great Sun with a short position of Guocheng Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Sun and Guocheng Mining.
Diversification Opportunities for Great Sun and Guocheng Mining
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Great and Guocheng is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Great Sun Foods Co and Guocheng Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guocheng Mining and Great Sun 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 Great Sun Foods Co are associated (or correlated) with Guocheng Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guocheng Mining has no effect on the direction of Great Sun i.e., Great Sun and Guocheng Mining go up and down completely randomly.
Pair Corralation between Great Sun and Guocheng Mining
Assuming the 90 days trading horizon Great Sun is expected to generate 7.96 times less return on investment than Guocheng Mining. But when comparing it to its historical volatility, Great Sun Foods Co is 1.51 times less risky than Guocheng Mining. It trades about 0.05 of its potential returns per unit of risk. Guocheng Mining Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,262 in Guocheng Mining Co on September 13, 2024 and sell it today you would earn a total of 268.00 from holding Guocheng Mining Co or generate 21.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Sun Foods Co vs. Guocheng Mining Co
Performance |
| Timeline |
| Great Sun Foods |
| Guocheng Mining |
Great Sun and Guocheng Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Sun and Guocheng Mining
The main advantage of trading using opposite Great Sun and Guocheng Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Sun position performs unexpectedly, Guocheng Mining 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 Guocheng Mining will offset losses from the drop in Guocheng Mining's long position.| Great Sun vs. Nanjing Putian Telecommunications | Great Sun vs. Tianjin Realty Development | Great Sun vs. Kangyue Technology Co | Great Sun vs. Shenzhen Hifuture Electric |
| Guocheng Mining vs. Cambricon Technologies Corp | Guocheng Mining vs. Loongson Technology Corp | Guocheng Mining vs. Shenzhen Fortune Trend | Guocheng Mining vs. Chongqing Road Bridge |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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