Correlation Between Chahua Modern and Guangdong Advertising
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By analyzing existing cross correlation between Chahua Modern Housewares and Guangdong Advertising Co, you can compare the effects of market volatilities on Chahua Modern 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 Chahua Modern with a short position of Guangdong Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chahua Modern and Guangdong Advertising.
Diversification Opportunities for Chahua Modern and Guangdong Advertising
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chahua and Guangdong is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Chahua Modern Housewares and Guangdong Advertising Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Advertising and Chahua Modern 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 Chahua Modern Housewares 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 Chahua Modern i.e., Chahua Modern and Guangdong Advertising go up and down completely randomly.
Pair Corralation between Chahua Modern and Guangdong Advertising
Assuming the 90 days trading horizon Chahua Modern is expected to generate 1.22 times less return on investment than Guangdong Advertising. But when comparing it to its historical volatility, Chahua Modern Housewares is 1.03 times less risky than Guangdong Advertising. It trades about 0.2 of its potential returns per unit of risk. Guangdong Advertising Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 468.00 in Guangdong Advertising Co on September 2, 2024 and sell it today you would earn a total of 388.00 from holding Guangdong Advertising Co or generate 82.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chahua Modern Housewares vs. Guangdong Advertising Co
Performance |
| Timeline |
| Chahua Modern Housewares |
| Guangdong Advertising |
Chahua Modern and Guangdong Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chahua Modern and Guangdong Advertising
The main advantage of trading using opposite Chahua Modern and Guangdong Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chahua Modern 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.| Chahua Modern vs. Guangzhou Ruoyuchen Information | Chahua Modern vs. Guangzhou Jointas Chemical | Chahua Modern vs. Lianhe Chemical Technology | Chahua Modern vs. Dawning Information Industry |
| Guangdong Advertising vs. Chongqing Brewery Co | Guangdong Advertising vs. Hengkang Medical Group | Guangdong Advertising vs. Double Medical Technology | Guangdong Advertising vs. Shandong Publishing Media |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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