Correlation Between Guangzhou Fangbang and Muyuan Foodstuff
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By analyzing existing cross correlation between Guangzhou Fangbang Electronics and Muyuan Foodstuff Co, you can compare the effects of market volatilities on Guangzhou Fangbang and Muyuan Foodstuff 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 Muyuan Foodstuff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Fangbang and Muyuan Foodstuff.
Diversification Opportunities for Guangzhou Fangbang and Muyuan Foodstuff
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Muyuan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Fangbang Electronics and Muyuan Foodstuff Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muyuan Foodstuff 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 Muyuan Foodstuff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muyuan Foodstuff has no effect on the direction of Guangzhou Fangbang i.e., Guangzhou Fangbang and Muyuan Foodstuff go up and down completely randomly.
Pair Corralation between Guangzhou Fangbang and Muyuan Foodstuff
Assuming the 90 days trading horizon Guangzhou Fangbang Electronics is expected to generate 2.32 times more return on investment than Muyuan Foodstuff. However, Guangzhou Fangbang is 2.32 times more volatile than Muyuan Foodstuff Co. It trades about 0.0 of its potential returns per unit of risk. Muyuan Foodstuff Co is currently generating about -0.02 per unit of risk. If you would invest 5,477 in Guangzhou Fangbang Electronics on October 18, 2024 and sell it today you would lose (2,117) from holding Guangzhou Fangbang Electronics or give up 38.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Guangzhou Fangbang Electronics vs. Muyuan Foodstuff Co
Performance |
| Timeline |
| Guangzhou Fangbang |
| Muyuan Foodstuff |
Guangzhou Fangbang and Muyuan Foodstuff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Fangbang and Muyuan Foodstuff
The main advantage of trading using opposite Guangzhou Fangbang and Muyuan Foodstuff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Fangbang position performs unexpectedly, Muyuan Foodstuff 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 Muyuan Foodstuff will offset losses from the drop in Muyuan Foodstuff's long position.| Guangzhou Fangbang vs. Muyuan Foodstuff Co | Guangzhou Fangbang vs. Jahen Household Products | Guangzhou Fangbang vs. Ligao Foods CoLtd | Guangzhou Fangbang vs. Eastroc Beverage Group |
| Muyuan Foodstuff vs. Silkroad Visual Technology | Muyuan Foodstuff vs. Zhongshan Broad Ocean Motor | Muyuan Foodstuff vs. RoadMain T Co | Muyuan Foodstuff vs. Tongyu Communication |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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