Correlation Between Guangzhou Fangbang and Gansu Huangtai
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By analyzing existing cross correlation between Guangzhou Fangbang Electronics and Gansu Huangtai Wine marketing, you can compare the effects of market volatilities on Guangzhou Fangbang and Gansu Huangtai 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 Guangzhou Fangbang with a short position of Gansu Huangtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Fangbang and Gansu Huangtai.
Diversification Opportunities for Guangzhou Fangbang and Gansu Huangtai
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangzhou and Gansu is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Fangbang Electronics and Gansu Huangtai Wine marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Huangtai Wine and Guangzhou Fangbang 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 Guangzhou Fangbang Electronics are associated (or correlated) with Gansu Huangtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Huangtai Wine has no effect on the direction of Guangzhou Fangbang i.e., Guangzhou Fangbang and Gansu Huangtai go up and down completely randomly.
Pair Corralation between Guangzhou Fangbang and Gansu Huangtai
Assuming the 90 days trading horizon Guangzhou Fangbang Electronics is expected to generate 0.6 times more return on investment than Gansu Huangtai. However, Guangzhou Fangbang Electronics is 1.65 times less risky than Gansu Huangtai. It trades about 0.11 of its potential returns per unit of risk. Gansu Huangtai Wine marketing is currently generating about -0.03 per unit of risk. If you would invest 3,154 in Guangzhou Fangbang Electronics on November 7, 2024 and sell it today you would earn a total of 133.00 from holding Guangzhou Fangbang Electronics or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Fangbang Electronics vs. Gansu Huangtai Wine marketing
Performance |
| Timeline |
| Guangzhou Fangbang |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Gansu Huangtai Wine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guangzhou Fangbang and Gansu Huangtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Fangbang and Gansu Huangtai
The main advantage of trading using opposite Guangzhou Fangbang and Gansu Huangtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Fangbang position performs unexpectedly, Gansu Huangtai 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 Gansu Huangtai will offset losses from the drop in Gansu Huangtai's long position.The idea behind Guangzhou Fangbang Electronics and Gansu Huangtai Wine marketing 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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