Correlation Between Guangdong Liantai and City Development
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By analyzing existing cross correlation between Guangdong Liantai Environmental and City Development Environment, you can compare the effects of market volatilities on Guangdong Liantai and City Development 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 City Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Liantai and City Development.
Diversification Opportunities for Guangdong Liantai and City Development
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and City is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Liantai Environmenta and City Development Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Development Env 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 City Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Development Env has no effect on the direction of Guangdong Liantai i.e., Guangdong Liantai and City Development go up and down completely randomly.
Pair Corralation between Guangdong Liantai and City Development
Assuming the 90 days trading horizon Guangdong Liantai Environmental is expected to under-perform the City Development. In addition to that, Guangdong Liantai is 1.65 times more volatile than City Development Environment. It trades about -0.4 of its total potential returns per unit of risk. City Development Environment is currently generating about -0.45 per unit of volatility. If you would invest 1,368 in City Development Environment on October 14, 2024 and sell it today you would lose (153.00) from holding City Development Environment or give up 11.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Liantai Environmenta vs. City Development Environment
Performance |
| Timeline |
| Guangdong Liantai |
| City Development Env |
Guangdong Liantai and City Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Liantai and City Development
The main advantage of trading using opposite Guangdong Liantai and City Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Liantai position performs unexpectedly, City Development 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 City Development will offset losses from the drop in City Development's long position.| Guangdong Liantai vs. Shenzhen MYS Environmental | Guangdong Liantai vs. AVIC Fund Management | Guangdong Liantai vs. Rongan Property Co | Guangdong Liantai vs. Haoxiangni Jujube Co |
| City Development vs. HaiXin Foods Co | City Development vs. JuneYao Dairy Co | City Development vs. Yankershop Food Co | City Development vs. Tsingtao Brewery Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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