Correlation Between GWILLI FOOD and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both GWILLI FOOD and CHINA HUARONG at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GWILLI FOOD and CHINA HUARONG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GWILLI FOOD and CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on GWILLI FOOD and CHINA HUARONG 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 GWILLI FOOD with a short position of CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of GWILLI FOOD and CHINA HUARONG.
Diversification Opportunities for GWILLI FOOD and CHINA HUARONG
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GWILLI and CHINA is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD and GWILLI FOOD 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 GWILLI FOOD are associated (or correlated) with CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and CHINA HUARONG go up and down completely randomly.
Pair Corralation between GWILLI FOOD and CHINA HUARONG
Assuming the 90 days trading horizon GWILLI FOOD is expected to under-perform the CHINA HUARONG. But the stock apears to be less risky and, when comparing its historical volatility, GWILLI FOOD is 23.84 times less risky than CHINA HUARONG. The stock trades about -0.01 of its potential returns per unit of risk. The CHINA HUARONG ENERHD 50 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.20 in CHINA HUARONG ENERHD 50 on November 3, 2024 and sell it today you would lose (0.10) from holding CHINA HUARONG ENERHD 50 or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GWILLI FOOD vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| GWILLI FOOD |
| CHINA HUARONG ENERHD |
GWILLI FOOD and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GWILLI FOOD and CHINA HUARONG
The main advantage of trading using opposite GWILLI FOOD and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GWILLI FOOD position performs unexpectedly, CHINA HUARONG 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 CHINA HUARONG will offset losses from the drop in CHINA HUARONG's long position.| GWILLI FOOD vs. Firan Technology Group | GWILLI FOOD vs. Playtech plc | GWILLI FOOD vs. MOVIE GAMES SA | GWILLI FOOD vs. CHINA TONTINE WINES |
| CHINA HUARONG vs. Citic Telecom International | CHINA HUARONG vs. Telecom Argentina SA | CHINA HUARONG vs. Spirent Communications plc | CHINA HUARONG vs. COMBA TELECOM SYST |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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