Correlation Between Qijing Machinery and Guangzhou KDT
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By analyzing existing cross correlation between Qijing Machinery and Guangzhou KDT Machinery, you can compare the effects of market volatilities on Qijing Machinery and Guangzhou KDT 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 Qijing Machinery with a short position of Guangzhou KDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qijing Machinery and Guangzhou KDT.
Diversification Opportunities for Qijing Machinery and Guangzhou KDT
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qijing and Guangzhou is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Qijing Machinery and Guangzhou KDT Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou KDT Machinery and Qijing Machinery 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 Qijing Machinery are associated (or correlated) with Guangzhou KDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou KDT Machinery has no effect on the direction of Qijing Machinery i.e., Qijing Machinery and Guangzhou KDT go up and down completely randomly.
Pair Corralation between Qijing Machinery and Guangzhou KDT
Assuming the 90 days trading horizon Qijing Machinery is expected to generate 2.26 times more return on investment than Guangzhou KDT. However, Qijing Machinery is 2.26 times more volatile than Guangzhou KDT Machinery. It trades about -0.11 of its potential returns per unit of risk. Guangzhou KDT Machinery is currently generating about -0.47 per unit of risk. If you would invest 1,405 in Qijing Machinery on October 12, 2024 and sell it today you would lose (118.00) from holding Qijing Machinery or give up 8.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qijing Machinery vs. Guangzhou KDT Machinery
Performance |
| Timeline |
| Qijing Machinery |
| Guangzhou KDT Machinery |
Qijing Machinery and Guangzhou KDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qijing Machinery and Guangzhou KDT
The main advantage of trading using opposite Qijing Machinery and Guangzhou KDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qijing Machinery position performs unexpectedly, Guangzhou KDT 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 KDT will offset losses from the drop in Guangzhou KDT's long position.| Qijing Machinery vs. Biwin Storage Technology | Qijing Machinery vs. PetroChina Co Ltd | Qijing Machinery vs. Industrial and Commercial | Qijing Machinery vs. China Construction Bank |
| Guangzhou KDT vs. Elite Color Environmental | Guangzhou KDT vs. Central Plains Environment | Guangzhou KDT vs. Changjiang Jinggong Steel | Guangzhou KDT vs. Hangzhou Guotai Environmental |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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