Correlation Between Guangdong Liantai and XinJiang GuoTong
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By analyzing existing cross correlation between Guangdong Liantai Environmental and XinJiang GuoTong Pipeline, you can compare the effects of market volatilities on Guangdong Liantai and XinJiang GuoTong 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 XinJiang GuoTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Liantai and XinJiang GuoTong.
Diversification Opportunities for Guangdong Liantai and XinJiang GuoTong
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and XinJiang is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Liantai Environmenta and XinJiang GuoTong Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XinJiang GuoTong Pipeline 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 XinJiang GuoTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XinJiang GuoTong Pipeline has no effect on the direction of Guangdong Liantai i.e., Guangdong Liantai and XinJiang GuoTong go up and down completely randomly.
Pair Corralation between Guangdong Liantai and XinJiang GuoTong
Assuming the 90 days trading horizon Guangdong Liantai Environmental is expected to generate 0.44 times more return on investment than XinJiang GuoTong. However, Guangdong Liantai Environmental is 2.3 times less risky than XinJiang GuoTong. It trades about -0.4 of its potential returns per unit of risk. XinJiang GuoTong Pipeline is currently generating about -0.24 per unit of risk. If you would invest 446.00 in Guangdong Liantai Environmental on October 14, 2024 and sell it today you would lose (72.00) from holding Guangdong Liantai Environmental or give up 16.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Liantai Environmenta vs. XinJiang GuoTong Pipeline
Performance |
| Timeline |
| Guangdong Liantai |
| XinJiang GuoTong Pipeline |
Guangdong Liantai and XinJiang GuoTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Liantai and XinJiang GuoTong
The main advantage of trading using opposite Guangdong Liantai and XinJiang GuoTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Liantai position performs unexpectedly, XinJiang GuoTong 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 XinJiang GuoTong will offset losses from the drop in XinJiang GuoTong's long position.| Guangdong Liantai vs. Shenzhen MYS Environmental | Guangdong Liantai vs. AVIC Fund Management | Guangdong Liantai vs. Haoxiangni Jujube Co | Guangdong Liantai vs. Shenzhen Bingchuan Network |
| XinJiang GuoTong vs. Nanxing Furniture Machinery | XinJiang GuoTong vs. Digiwin Software Co | XinJiang GuoTong vs. Hunan Tyen Machinery | XinJiang GuoTong vs. Tianjin Ruixin Technology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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