Correlation Between Guangdong Liantai and Changchun BCHT
Specify exactly 2 symbols:
By analyzing existing cross correlation between Guangdong Liantai Environmental and Changchun BCHT Biotechnology, you can compare the effects of market volatilities on Guangdong Liantai and Changchun BCHT 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 Changchun BCHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Liantai and Changchun BCHT.
Diversification Opportunities for Guangdong Liantai and Changchun BCHT
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Changchun is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Liantai Environmenta and Changchun BCHT Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun BCHT Biote 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 Changchun BCHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun BCHT Biote has no effect on the direction of Guangdong Liantai i.e., Guangdong Liantai and Changchun BCHT go up and down completely randomly.
Pair Corralation between Guangdong Liantai and Changchun BCHT
Assuming the 90 days trading horizon Guangdong Liantai Environmental is expected to generate 1.04 times more return on investment than Changchun BCHT. However, Guangdong Liantai is 1.04 times more volatile than Changchun BCHT Biotechnology. It trades about 0.22 of its potential returns per unit of risk. Changchun BCHT Biotechnology is currently generating about -0.16 per unit of risk. If you would invest 384.00 in Guangdong Liantai Environmental on November 9, 2024 and sell it today you would earn a total of 17.00 from holding Guangdong Liantai Environmental or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Liantai Environmenta vs. Changchun BCHT Biotechnology
Performance |
| Timeline |
| Guangdong Liantai |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Changchun BCHT Biote |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Guangdong Liantai and Changchun BCHT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Liantai and Changchun BCHT
The main advantage of trading using opposite Guangdong Liantai and Changchun BCHT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Liantai position performs unexpectedly, Changchun BCHT 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 Changchun BCHT will offset losses from the drop in Changchun BCHT's long position.The idea behind Guangdong Liantai Environmental and Changchun BCHT Biotechnology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |