Correlation Between Bangyan Technology and Guangzhou Hongli
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By analyzing existing cross correlation between Bangyan Technology Co and Guangzhou Hongli Opto, you can compare the effects of market volatilities on Bangyan Technology and Guangzhou Hongli 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 Bangyan Technology with a short position of Guangzhou Hongli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangyan Technology and Guangzhou Hongli.
Diversification Opportunities for Bangyan Technology and Guangzhou Hongli
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bangyan and Guangzhou is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bangyan Technology Co and Guangzhou Hongli Opto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Hongli Opto and Bangyan Technology 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 Bangyan Technology Co are associated (or correlated) with Guangzhou Hongli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Hongli Opto has no effect on the direction of Bangyan Technology i.e., Bangyan Technology and Guangzhou Hongli go up and down completely randomly.
Pair Corralation between Bangyan Technology and Guangzhou Hongli
Assuming the 90 days trading horizon Bangyan Technology Co is expected to generate 1.64 times more return on investment than Guangzhou Hongli. However, Bangyan Technology is 1.64 times more volatile than Guangzhou Hongli Opto. It trades about 0.05 of its potential returns per unit of risk. Guangzhou Hongli Opto is currently generating about -0.18 per unit of risk. If you would invest 1,692 in Bangyan Technology Co on October 30, 2024 and sell it today you would earn a total of 90.00 from holding Bangyan Technology Co or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangyan Technology Co vs. Guangzhou Hongli Opto
Performance |
| Timeline |
| Bangyan Technology |
| Guangzhou Hongli Opto |
Bangyan Technology and Guangzhou Hongli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangyan Technology and Guangzhou Hongli
The main advantage of trading using opposite Bangyan Technology and Guangzhou Hongli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangyan Technology position performs unexpectedly, Guangzhou Hongli 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 Hongli will offset losses from the drop in Guangzhou Hongli's long position.| Bangyan Technology vs. Bus Online Co | Bangyan Technology vs. Holitech Technology Co | Bangyan Technology vs. Gome Telecom Equipment | Bangyan Technology vs. Cultural Investment Holdings |
| Guangzhou Hongli vs. Hainan Haiqi Transportation | Guangzhou Hongli vs. Lontium Semiconductor Corp | Guangzhou Hongli vs. Hubei Tech Semiconductors | Guangzhou Hongli vs. Dazhong Transportation Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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