Correlation Between UE Furniture and GuoChuang Software
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By analyzing existing cross correlation between UE Furniture Co and GuoChuang Software Co, you can compare the effects of market volatilities on UE Furniture and GuoChuang Software 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 UE Furniture with a short position of GuoChuang Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of UE Furniture and GuoChuang Software.
Diversification Opportunities for UE Furniture and GuoChuang Software
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 603600 and GuoChuang is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding UE Furniture Co and GuoChuang Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GuoChuang Software and UE Furniture 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 UE Furniture Co are associated (or correlated) with GuoChuang Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GuoChuang Software has no effect on the direction of UE Furniture i.e., UE Furniture and GuoChuang Software go up and down completely randomly.
Pair Corralation between UE Furniture and GuoChuang Software
Assuming the 90 days trading horizon UE Furniture Co is expected to generate 0.62 times more return on investment than GuoChuang Software. However, UE Furniture Co is 1.61 times less risky than GuoChuang Software. It trades about 0.03 of its potential returns per unit of risk. GuoChuang Software Co is currently generating about 0.02 per unit of risk. If you would invest 1,039 in UE Furniture Co on November 7, 2024 and sell it today you would earn a total of 246.00 from holding UE Furniture Co or generate 23.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UE Furniture Co vs. GuoChuang Software Co
Performance |
| Timeline |
| UE Furniture |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| GuoChuang Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
UE Furniture and GuoChuang Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UE Furniture and GuoChuang Software
The main advantage of trading using opposite UE Furniture and GuoChuang Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UE Furniture position performs unexpectedly, GuoChuang Software 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 GuoChuang Software will offset losses from the drop in GuoChuang Software's long position.The idea behind UE Furniture Co and GuoChuang Software Co 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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