Correlation Between Guangzhou Fangbang and Jiujiang Shanshui
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By analyzing existing cross correlation between Guangzhou Fangbang Electronics and Jiujiang Shanshui Technology, you can compare the effects of market volatilities on Guangzhou Fangbang and Jiujiang Shanshui 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 Jiujiang Shanshui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Fangbang and Jiujiang Shanshui.
Diversification Opportunities for Guangzhou Fangbang and Jiujiang Shanshui
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Jiujiang is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Fangbang Electronics and Jiujiang Shanshui Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiujiang Shanshui 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 Jiujiang Shanshui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiujiang Shanshui has no effect on the direction of Guangzhou Fangbang i.e., Guangzhou Fangbang and Jiujiang Shanshui go up and down completely randomly.
Pair Corralation between Guangzhou Fangbang and Jiujiang Shanshui
Assuming the 90 days trading horizon Guangzhou Fangbang Electronics is expected to under-perform the Jiujiang Shanshui. In addition to that, Guangzhou Fangbang is 1.57 times more volatile than Jiujiang Shanshui Technology. It trades about -0.1 of its total potential returns per unit of risk. Jiujiang Shanshui Technology is currently generating about -0.08 per unit of volatility. If you would invest 1,630 in Jiujiang Shanshui Technology on October 30, 2024 and sell it today you would lose (90.00) from holding Jiujiang Shanshui Technology or give up 5.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Fangbang Electronics vs. Jiujiang Shanshui Technology
Performance |
| Timeline |
| Guangzhou Fangbang |
| Jiujiang Shanshui |
Guangzhou Fangbang and Jiujiang Shanshui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Fangbang and Jiujiang Shanshui
The main advantage of trading using opposite Guangzhou Fangbang and Jiujiang Shanshui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Fangbang position performs unexpectedly, Jiujiang Shanshui 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 Jiujiang Shanshui will offset losses from the drop in Jiujiang Shanshui's long position.| Guangzhou Fangbang vs. Gansu Huangtai Wine marketing | Guangzhou Fangbang vs. Lootom Telcovideo Network | Guangzhou Fangbang vs. Vats Liquor Chain | Guangzhou Fangbang vs. Xiamen Goldenhome Co |
| Jiujiang Shanshui vs. Zhejiang Yinlun Machinery | Jiujiang Shanshui vs. Beijing Kaiwen Education | Jiujiang Shanshui vs. Lutian Machinery Co | Jiujiang Shanshui vs. Masterwork Machinery |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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