Correlation Between Guangdong Skychem and Xinjiang Communications
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By analyzing existing cross correlation between Guangdong Skychem Technology and Xinjiang Communications Construction, you can compare the effects of market volatilities on Guangdong Skychem and Xinjiang Communications 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 Skychem with a short position of Xinjiang Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Skychem and Xinjiang Communications.
Diversification Opportunities for Guangdong Skychem and Xinjiang Communications
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Xinjiang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Skychem Technology and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Communications and Guangdong Skychem 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 Skychem Technology are associated (or correlated) with Xinjiang Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Communications has no effect on the direction of Guangdong Skychem i.e., Guangdong Skychem and Xinjiang Communications go up and down completely randomly.
Pair Corralation between Guangdong Skychem and Xinjiang Communications
Assuming the 90 days trading horizon Guangdong Skychem Technology is expected to generate 1.26 times more return on investment than Xinjiang Communications. However, Guangdong Skychem is 1.26 times more volatile than Xinjiang Communications Construction. It trades about 0.21 of its potential returns per unit of risk. Xinjiang Communications Construction is currently generating about 0.08 per unit of risk. If you would invest 4,762 in Guangdong Skychem Technology on September 30, 2024 and sell it today you would earn a total of 7,238 from holding Guangdong Skychem Technology or generate 151.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Skychem Technology vs. Xinjiang Communications Constr
Performance |
| Timeline |
| Guangdong Skychem |
| Xinjiang Communications |
Guangdong Skychem and Xinjiang Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Skychem and Xinjiang Communications
The main advantage of trading using opposite Guangdong Skychem and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Skychem position performs unexpectedly, Xinjiang Communications 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 Xinjiang Communications will offset losses from the drop in Xinjiang Communications' long position.| Guangdong Skychem vs. Industrial and Commercial | Guangdong Skychem vs. Kweichow Moutai Co | Guangdong Skychem vs. Agricultural Bank of | Guangdong Skychem vs. China Mobile Limited |
| Xinjiang Communications vs. Agricultural Bank of | Xinjiang Communications vs. Industrial and Commercial | Xinjiang Communications vs. Bank of China | Xinjiang Communications vs. China Construction Bank |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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