Correlation Between Guangdong Liantai and Guangdong Jingyi
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By analyzing existing cross correlation between Guangdong Liantai Environmental and Guangdong Jingyi Metal, you can compare the effects of market volatilities on Guangdong Liantai and Guangdong Jingyi 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 Guangdong Jingyi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Liantai and Guangdong Jingyi.
Diversification Opportunities for Guangdong Liantai and Guangdong Jingyi
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Guangdong is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Liantai Environmenta and Guangdong Jingyi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jingyi Metal 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 Guangdong Jingyi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jingyi Metal has no effect on the direction of Guangdong Liantai i.e., Guangdong Liantai and Guangdong Jingyi go up and down completely randomly.
Pair Corralation between Guangdong Liantai and Guangdong Jingyi
Assuming the 90 days trading horizon Guangdong Liantai Environmental is expected to generate 0.74 times more return on investment than Guangdong Jingyi. However, Guangdong Liantai Environmental is 1.34 times less risky than Guangdong Jingyi. It trades about 0.02 of its potential returns per unit of risk. Guangdong Jingyi Metal is currently generating about 0.01 per unit of risk. If you would invest 401.00 in Guangdong Liantai Environmental on January 27, 2025 and sell it today you would earn a total of 2.00 from holding Guangdong Liantai Environmental or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Liantai Environmenta vs. Guangdong Jingyi Metal
Performance |
| Timeline |
| Guangdong Liantai |
| Guangdong Jingyi Metal |
Guangdong Liantai and Guangdong Jingyi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Liantai and Guangdong Jingyi
The main advantage of trading using opposite Guangdong Liantai and Guangdong Jingyi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Liantai position performs unexpectedly, Guangdong Jingyi 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 Guangdong Jingyi will offset losses from the drop in Guangdong Jingyi's long position.| Guangdong Liantai vs. Nanjing Putian Telecommunications | Guangdong Liantai vs. Guangdong Songfa Ceramics | Guangdong Liantai vs. Cloud Live Technology | Guangdong Liantai vs. Shenzhen Coship Electronics |
| Guangdong Jingyi vs. Anhui Gujing Distillery | Guangdong Jingyi vs. Beijing Mainstreets Investment | Guangdong Jingyi vs. Shaanxi Energy Investment | Guangdong Jingyi vs. Zhongrun Resources Investment |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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