Correlation Between Guangdong Liantai and Shengyi Technology
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By analyzing existing cross correlation between Guangdong Liantai Environmental and Shengyi Technology Co, you can compare the effects of market volatilities on Guangdong Liantai and Shengyi Technology 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 Shengyi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Liantai and Shengyi Technology.
Diversification Opportunities for Guangdong Liantai and Shengyi Technology
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Shengyi is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Liantai Environmenta and Shengyi Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengyi Technology 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 Shengyi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengyi Technology has no effect on the direction of Guangdong Liantai i.e., Guangdong Liantai and Shengyi Technology go up and down completely randomly.
Pair Corralation between Guangdong Liantai and Shengyi Technology
Assuming the 90 days trading horizon Guangdong Liantai Environmental is expected to under-perform the Shengyi Technology. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Liantai Environmental is 1.06 times less risky than Shengyi Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Shengyi Technology Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,781 in Shengyi Technology Co on September 12, 2024 and sell it today you would earn a total of 501.00 from holding Shengyi Technology Co or generate 28.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Liantai Environmenta vs. Shengyi Technology Co
Performance |
| Timeline |
| Guangdong Liantai |
| Shengyi Technology |
Guangdong Liantai and Shengyi Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Liantai and Shengyi Technology
The main advantage of trading using opposite Guangdong Liantai and Shengyi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Liantai position performs unexpectedly, Shengyi Technology 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 Shengyi Technology will offset losses from the drop in Shengyi Technology's long position.| Guangdong Liantai vs. Agricultural Bank of | Guangdong Liantai vs. Industrial and Commercial | Guangdong Liantai vs. Bank of China | Guangdong Liantai vs. PetroChina Co Ltd |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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