Correlation Between Guangdong Investment and 74256LEE5
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By analyzing existing cross correlation between Guangdong Investment Limited and US74256LEE56, you can compare the effects of market volatilities on Guangdong Investment and 74256LEE5 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 Investment with a short position of 74256LEE5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and 74256LEE5.
Diversification Opportunities for Guangdong Investment and 74256LEE5
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guangdong and 74256LEE5 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and US74256LEE56 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US74256LEE56 and Guangdong Investment 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 Investment Limited are associated (or correlated) with 74256LEE5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US74256LEE56 has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and 74256LEE5 go up and down completely randomly.
Pair Corralation between Guangdong Investment and 74256LEE5
Assuming the 90 days horizon Guangdong Investment Limited is expected to generate 10.0 times more return on investment than 74256LEE5. However, Guangdong Investment is 10.0 times more volatile than US74256LEE56. It trades about 0.08 of its potential returns per unit of risk. US74256LEE56 is currently generating about -0.04 per unit of risk. If you would invest 55.00 in Guangdong Investment Limited on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Guangdong Investment Limited or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 65.08% |
| Values | Daily Returns |
Guangdong Investment Limited vs. US74256LEE56
Performance |
| Timeline |
| Guangdong Investment |
| US74256LEE56 |
Guangdong Investment and 74256LEE5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Investment and 74256LEE5
The main advantage of trading using opposite Guangdong Investment and 74256LEE5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment position performs unexpectedly, 74256LEE5 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 74256LEE5 will offset losses from the drop in 74256LEE5's long position.| Guangdong Investment vs. Essential Utilities | Guangdong Investment vs. Guangdong Investment | Guangdong Investment vs. Anhui Conch Cement | Guangdong Investment vs. Beijing Enterprises Water |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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