Correlation Between Chahua Modern and Guosheng Financial
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By analyzing existing cross correlation between Chahua Modern Housewares and Guosheng Financial Holding, you can compare the effects of market volatilities on Chahua Modern and Guosheng Financial 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 Guosheng Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chahua Modern and Guosheng Financial.
Diversification Opportunities for Chahua Modern and Guosheng Financial
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chahua and Guosheng is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chahua Modern Housewares and Guosheng Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guosheng Financial 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 Guosheng Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guosheng Financial has no effect on the direction of Chahua Modern i.e., Chahua Modern and Guosheng Financial go up and down completely randomly.
Pair Corralation between Chahua Modern and Guosheng Financial
Assuming the 90 days trading horizon Chahua Modern Housewares is expected to generate 1.13 times more return on investment than Guosheng Financial. However, Chahua Modern is 1.13 times more volatile than Guosheng Financial Holding. It trades about 0.12 of its potential returns per unit of risk. Guosheng Financial Holding is currently generating about 0.12 per unit of risk. If you would invest 1,231 in Chahua Modern Housewares on September 12, 2024 and sell it today you would earn a total of 769.00 from holding Chahua Modern Housewares or generate 62.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chahua Modern Housewares vs. Guosheng Financial Holding
Performance |
| Timeline |
| Chahua Modern Housewares |
| Guosheng Financial |
Chahua Modern and Guosheng Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chahua Modern and Guosheng Financial
The main advantage of trading using opposite Chahua Modern and Guosheng Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chahua Modern position performs unexpectedly, Guosheng Financial 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 Guosheng Financial will offset losses from the drop in Guosheng Financial's long position.| Chahua Modern vs. Lutian Machinery Co | Chahua Modern vs. PetroChina Co Ltd | Chahua Modern vs. Bank of China | Chahua Modern vs. Gansu Jiu Steel |
| Guosheng Financial vs. Agricultural Bank of | Guosheng Financial vs. Industrial and Commercial | Guosheng Financial vs. Bank of China | Guosheng Financial vs. PetroChina Co Ltd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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