Correlation Between Guangdong Liantai and Olympic Circuit
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By analyzing existing cross correlation between Guangdong Liantai Environmental and Olympic Circuit Technology, you can compare the effects of market volatilities on Guangdong Liantai and Olympic Circuit 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 Olympic Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Liantai and Olympic Circuit.
Diversification Opportunities for Guangdong Liantai and Olympic Circuit
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Olympic is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Liantai Environmenta and Olympic Circuit Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Circuit Tech 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 Olympic Circuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympic Circuit Tech has no effect on the direction of Guangdong Liantai i.e., Guangdong Liantai and Olympic Circuit go up and down completely randomly.
Pair Corralation between Guangdong Liantai and Olympic Circuit
Assuming the 90 days trading horizon Guangdong Liantai is expected to generate 2.48 times less return on investment than Olympic Circuit. But when comparing it to its historical volatility, Guangdong Liantai Environmental is 1.95 times less risky than Olympic Circuit. It trades about 0.07 of its potential returns per unit of risk. Olympic Circuit Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,802 in Olympic Circuit Technology on September 5, 2024 and sell it today you would earn a total of 412.00 from holding Olympic Circuit Technology or generate 14.7% 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. Olympic Circuit Technology
Performance |
| Timeline |
| Guangdong Liantai |
| Olympic Circuit Tech |
Guangdong Liantai and Olympic Circuit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Liantai and Olympic Circuit
The main advantage of trading using opposite Guangdong Liantai and Olympic Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Liantai position performs unexpectedly, Olympic Circuit 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 Olympic Circuit will offset losses from the drop in Olympic Circuit's long position.| Guangdong Liantai vs. Anji Foodstuff Co | Guangdong Liantai vs. Ningbo Ligong Online | Guangdong Liantai vs. Hunan Mendale Hometextile | Guangdong Liantai vs. Fiberhome Telecommunication Technologies |
| Olympic Circuit vs. Gansu Yasheng Industrial | Olympic Circuit vs. Guangdong Liantai Environmental | Olympic Circuit vs. City Development Environment | Olympic Circuit vs. Shenzhen MYS Environmental |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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