Correlation Between Guangdong Cellwise and Shandong Sanyuan
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By analyzing existing cross correlation between Guangdong Cellwise Microelectronics and Shandong Sanyuan Biotechnology, you can compare the effects of market volatilities on Guangdong Cellwise and Shandong Sanyuan 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 Guangdong Cellwise with a short position of Shandong Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Cellwise and Shandong Sanyuan.
Diversification Opportunities for Guangdong Cellwise and Shandong Sanyuan
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and Shandong is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Cellwise Microelectr and Shandong Sanyuan Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sanyuan Bio and Guangdong Cellwise 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 Guangdong Cellwise Microelectronics are associated (or correlated) with Shandong Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sanyuan Bio has no effect on the direction of Guangdong Cellwise i.e., Guangdong Cellwise and Shandong Sanyuan go up and down completely randomly.
Pair Corralation between Guangdong Cellwise and Shandong Sanyuan
Assuming the 90 days trading horizon Guangdong Cellwise Microelectronics is expected to generate 1.73 times more return on investment than Shandong Sanyuan. However, Guangdong Cellwise is 1.73 times more volatile than Shandong Sanyuan Biotechnology. It trades about 0.01 of its potential returns per unit of risk. Shandong Sanyuan Biotechnology is currently generating about -0.02 per unit of risk. If you would invest 4,914 in Guangdong Cellwise Microelectronics on October 16, 2024 and sell it today you would lose (409.00) from holding Guangdong Cellwise Microelectronics or give up 8.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Cellwise Microelectr vs. Shandong Sanyuan Biotechnology
Performance |
| Timeline |
| Guangdong Cellwise |
| Shandong Sanyuan Bio |
Guangdong Cellwise and Shandong Sanyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Cellwise and Shandong Sanyuan
The main advantage of trading using opposite Guangdong Cellwise and Shandong Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Cellwise position performs unexpectedly, Shandong Sanyuan 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 Shandong Sanyuan will offset losses from the drop in Shandong Sanyuan's long position.The idea behind Guangdong Cellwise Microelectronics and Shandong Sanyuan Biotechnology 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.
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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