Correlation Between Guangdong Liantai and HeNan Splendor
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By analyzing existing cross correlation between Guangdong Liantai Environmental and HeNan Splendor Science, you can compare the effects of market volatilities on Guangdong Liantai and HeNan Splendor 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 HeNan Splendor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Liantai and HeNan Splendor.
Diversification Opportunities for Guangdong Liantai and HeNan Splendor
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and HeNan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Liantai Environmenta and HeNan Splendor Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeNan Splendor Science 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 HeNan Splendor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeNan Splendor Science has no effect on the direction of Guangdong Liantai i.e., Guangdong Liantai and HeNan Splendor go up and down completely randomly.
Pair Corralation between Guangdong Liantai and HeNan Splendor
Assuming the 90 days trading horizon Guangdong Liantai Environmental is expected to under-perform the HeNan Splendor. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Liantai Environmental is 1.56 times less risky than HeNan Splendor. The stock trades about -0.29 of its potential returns per unit of risk. The HeNan Splendor Science is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 1,072 in HeNan Splendor Science on October 17, 2024 and sell it today you would lose (130.00) from holding HeNan Splendor Science or give up 12.13% 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. HeNan Splendor Science
Performance |
| Timeline |
| Guangdong Liantai |
| HeNan Splendor Science |
Guangdong Liantai and HeNan Splendor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Liantai and HeNan Splendor
The main advantage of trading using opposite Guangdong Liantai and HeNan Splendor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Liantai position performs unexpectedly, HeNan Splendor 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 HeNan Splendor will offset losses from the drop in HeNan Splendor's long position.| Guangdong Liantai vs. MayAir Technology Co | Guangdong Liantai vs. Cultural Investment Holdings | Guangdong Liantai vs. Iat Automobile Technology | Guangdong Liantai vs. Guangzhou KingTeller Technology |
| HeNan Splendor vs. Beijing Kaiwen Education | HeNan Splendor vs. Sinocat Environmental Technology | HeNan Splendor vs. Guangdong Liantai Environmental | HeNan Splendor vs. Penyao Environmental Protection |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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