Correlation Between Guangzhou Fangbang and Fuzhou Rockchip
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By analyzing existing cross correlation between Guangzhou Fangbang Electronics and Fuzhou Rockchip Electronics, you can compare the effects of market volatilities on Guangzhou Fangbang and Fuzhou Rockchip 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 Fuzhou Rockchip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Fangbang and Fuzhou Rockchip.
Diversification Opportunities for Guangzhou Fangbang and Fuzhou Rockchip
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Fuzhou is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Fangbang Electronics and Fuzhou Rockchip Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuzhou Rockchip Elec 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 Fuzhou Rockchip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuzhou Rockchip Elec has no effect on the direction of Guangzhou Fangbang i.e., Guangzhou Fangbang and Fuzhou Rockchip go up and down completely randomly.
Pair Corralation between Guangzhou Fangbang and Fuzhou Rockchip
Assuming the 90 days trading horizon Guangzhou Fangbang is expected to generate 2.8 times less return on investment than Fuzhou Rockchip. In addition to that, Guangzhou Fangbang is 1.17 times more volatile than Fuzhou Rockchip Electronics. It trades about 0.05 of its total potential returns per unit of risk. Fuzhou Rockchip Electronics is currently generating about 0.15 per unit of volatility. If you would invest 5,757 in Fuzhou Rockchip Electronics on September 27, 2024 and sell it today you would earn a total of 4,723 from holding Fuzhou Rockchip Electronics or generate 82.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Fangbang Electronics vs. Fuzhou Rockchip Electronics
Performance |
| Timeline |
| Guangzhou Fangbang |
| Fuzhou Rockchip Elec |
Guangzhou Fangbang and Fuzhou Rockchip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Fangbang and Fuzhou Rockchip
The main advantage of trading using opposite Guangzhou Fangbang and Fuzhou Rockchip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Fangbang position performs unexpectedly, Fuzhou Rockchip 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 Fuzhou Rockchip will offset losses from the drop in Fuzhou Rockchip's long position.| Guangzhou Fangbang vs. Industrial and Commercial | Guangzhou Fangbang vs. China Construction Bank | Guangzhou Fangbang vs. Agricultural Bank of | Guangzhou Fangbang vs. Bank of China |
| Fuzhou Rockchip vs. Ming Yang Smart | Fuzhou Rockchip vs. 159681 | Fuzhou Rockchip vs. 159005 | Fuzhou Rockchip vs. Loctek Ergonomic Technology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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