Correlation Between Shanghai Rongtai and Guangzhou Haige
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By analyzing existing cross correlation between Shanghai Rongtai Health and Guangzhou Haige Communications, you can compare the effects of market volatilities on Shanghai Rongtai and Guangzhou Haige 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 Shanghai Rongtai with a short position of Guangzhou Haige. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Guangzhou Haige.
Diversification Opportunities for Shanghai Rongtai and Guangzhou Haige
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Guangzhou is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health and Guangzhou Haige Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haige Comm and Shanghai Rongtai 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 Shanghai Rongtai Health are associated (or correlated) with Guangzhou Haige. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haige Comm has no effect on the direction of Shanghai Rongtai i.e., Shanghai Rongtai and Guangzhou Haige go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Guangzhou Haige
Assuming the 90 days trading horizon Shanghai Rongtai is expected to generate 4.19 times less return on investment than Guangzhou Haige. But when comparing it to its historical volatility, Shanghai Rongtai Health is 1.91 times less risky than Guangzhou Haige. It trades about 0.05 of its potential returns per unit of risk. Guangzhou Haige Communications is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,099 in Guangzhou Haige Communications on August 25, 2024 and sell it today you would earn a total of 88.00 from holding Guangzhou Haige Communications or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Rongtai Health vs. Guangzhou Haige Communications
Performance |
| Timeline |
| Shanghai Rongtai Health |
| Guangzhou Haige Comm |
Shanghai Rongtai and Guangzhou Haige Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rongtai and Guangzhou Haige
The main advantage of trading using opposite Shanghai Rongtai and Guangzhou Haige positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai position performs unexpectedly, Guangzhou Haige 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 Haige will offset losses from the drop in Guangzhou Haige's long position.| Shanghai Rongtai vs. Hoshine Silicon Ind | Shanghai Rongtai vs. Agricultural Bank of | Shanghai Rongtai vs. Huatian Hotel Group | Shanghai Rongtai vs. Liuzhou Chemical Industry |
| Guangzhou Haige vs. Shanghai Rongtai Health | Guangzhou Haige vs. Shandong Sinoglory Health | Guangzhou Haige vs. Suzhou Mingzhi Technology | Guangzhou Haige vs. Yunnan Jianzhijia Health Chain |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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