Correlation Between Guobo Electronics and Sichuan Troy
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By analyzing existing cross correlation between Guobo Electronics Co and Sichuan Troy Information, you can compare the effects of market volatilities on Guobo Electronics and Sichuan Troy 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 Guobo Electronics with a short position of Sichuan Troy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guobo Electronics and Sichuan Troy.
Diversification Opportunities for Guobo Electronics and Sichuan Troy
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guobo and Sichuan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Guobo Electronics Co and Sichuan Troy Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Troy Information and Guobo Electronics 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 Guobo Electronics Co are associated (or correlated) with Sichuan Troy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Troy Information has no effect on the direction of Guobo Electronics i.e., Guobo Electronics and Sichuan Troy go up and down completely randomly.
Pair Corralation between Guobo Electronics and Sichuan Troy
Assuming the 90 days trading horizon Guobo Electronics Co is expected to under-perform the Sichuan Troy. But the stock apears to be less risky and, when comparing its historical volatility, Guobo Electronics Co is 1.48 times less risky than Sichuan Troy. The stock trades about -0.03 of its potential returns per unit of risk. The Sichuan Troy Information is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 830.00 in Sichuan Troy Information on November 7, 2024 and sell it today you would earn a total of 66.00 from holding Sichuan Troy Information or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guobo Electronics Co vs. Sichuan Troy Information
Performance |
| Timeline |
| Guobo Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sichuan Troy Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guobo Electronics and Sichuan Troy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guobo Electronics and Sichuan Troy
The main advantage of trading using opposite Guobo Electronics and Sichuan Troy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guobo Electronics position performs unexpectedly, Sichuan Troy 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 Sichuan Troy will offset losses from the drop in Sichuan Troy's long position.The idea behind Guobo Electronics Co and Sichuan Troy Information 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.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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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