Correlation Between Guangdong Liantai and ZTE Corp
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By analyzing existing cross correlation between Guangdong Liantai Environmental and ZTE Corp, you can compare the effects of market volatilities on Guangdong Liantai and ZTE Corp 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 Guangdong Liantai with a short position of ZTE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Liantai and ZTE Corp.
Diversification Opportunities for Guangdong Liantai and ZTE Corp
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangdong and ZTE is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Liantai Environmenta and ZTE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTE Corp and Guangdong Liantai 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 Guangdong Liantai Environmental are associated (or correlated) with ZTE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZTE Corp has no effect on the direction of Guangdong Liantai i.e., Guangdong Liantai and ZTE Corp go up and down completely randomly.
Pair Corralation between Guangdong Liantai and ZTE Corp
Assuming the 90 days trading horizon Guangdong Liantai Environmental is expected to under-perform the ZTE Corp. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Liantai Environmental is 2.82 times less risky than ZTE Corp. The stock trades about -0.11 of its potential returns per unit of risk. The ZTE Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,809 in ZTE Corp on October 26, 2024 and sell it today you would earn a total of 301.00 from holding ZTE Corp or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guangdong Liantai Environmenta vs. ZTE Corp
Performance |
| Timeline |
| Guangdong Liantai |
| ZTE Corp |
Guangdong Liantai and ZTE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Liantai and ZTE Corp
The main advantage of trading using opposite Guangdong Liantai and ZTE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Liantai position performs unexpectedly, ZTE Corp 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 ZTE Corp will offset losses from the drop in ZTE Corp's long position.| Guangdong Liantai vs. Miracll Chemicals Co | Guangdong Liantai vs. Yingde Greatchem Chemicals | Guangdong Liantai vs. Shaanxi Meineng Clean | Guangdong Liantai vs. Kuang Chi Technologies |
| ZTE Corp vs. Qtone Education Group | ZTE Corp vs. JuneYao Dairy Co | ZTE Corp vs. Xiwang Foodstuffs Co | ZTE Corp vs. Jiajia Food Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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