Correlation Between Suzhou Weizhixiang and Guangzhou Seagull
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By analyzing existing cross correlation between Suzhou Weizhixiang Food and Guangzhou Seagull Kitchen, you can compare the effects of market volatilities on Suzhou Weizhixiang and Guangzhou Seagull 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 Suzhou Weizhixiang with a short position of Guangzhou Seagull. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Weizhixiang and Guangzhou Seagull.
Diversification Opportunities for Suzhou Weizhixiang and Guangzhou Seagull
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suzhou and Guangzhou is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Weizhixiang Food and Guangzhou Seagull Kitchen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Seagull Kitchen and Suzhou Weizhixiang 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 Suzhou Weizhixiang Food are associated (or correlated) with Guangzhou Seagull. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Seagull Kitchen has no effect on the direction of Suzhou Weizhixiang i.e., Suzhou Weizhixiang and Guangzhou Seagull go up and down completely randomly.
Pair Corralation between Suzhou Weizhixiang and Guangzhou Seagull
Assuming the 90 days trading horizon Suzhou Weizhixiang Food is expected to under-perform the Guangzhou Seagull. But the stock apears to be less risky and, when comparing its historical volatility, Suzhou Weizhixiang Food is 1.02 times less risky than Guangzhou Seagull. The stock trades about -0.04 of its potential returns per unit of risk. The Guangzhou Seagull Kitchen is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 470.00 in Guangzhou Seagull Kitchen on October 12, 2024 and sell it today you would lose (170.00) from holding Guangzhou Seagull Kitchen or give up 36.17% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Suzhou Weizhixiang Food vs. Guangzhou Seagull Kitchen
Performance |
Timeline |
Suzhou Weizhixiang Food |
Guangzhou Seagull Kitchen |
Suzhou Weizhixiang and Guangzhou Seagull Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Suzhou Weizhixiang and Guangzhou Seagull
The main advantage of trading using opposite Suzhou Weizhixiang and Guangzhou Seagull positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Weizhixiang position performs unexpectedly, Guangzhou Seagull 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 Guangzhou Seagull will offset losses from the drop in Guangzhou Seagull's long position.Suzhou Weizhixiang vs. Xinya Electronic Co | Suzhou Weizhixiang vs. Guangzhou Dongfang Hotel | Suzhou Weizhixiang vs. Sihui Fuji Electronics | Suzhou Weizhixiang vs. Telling Telecommunication Holding |
Guangzhou Seagull vs. Unisplendour Corp | Guangzhou Seagull vs. Zhejiang JIULI Hi tech | Guangzhou Seagull vs. Ningbo Fujia Industrial | Guangzhou Seagull vs. FSPG Hi Tech Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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