Correlation Between Guangdong Investment and WPLAU
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By analyzing existing cross correlation between Guangdong Investment Limited and WPLAU 37 15 SEP 26, you can compare the effects of market volatilities on Guangdong Investment and WPLAU 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 WPLAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and WPLAU.
Diversification Opportunities for Guangdong Investment and WPLAU
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and WPLAU is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and WPLAU 37 15 SEP 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPLAU 37 15 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 WPLAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPLAU 37 15 has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and WPLAU go up and down completely randomly.
Pair Corralation between Guangdong Investment and WPLAU
Assuming the 90 days horizon Guangdong Investment Limited is expected to under-perform the WPLAU. In addition to that, Guangdong Investment is 12.54 times more volatile than WPLAU 37 15 SEP 26. It trades about -0.17 of its total potential returns per unit of risk. WPLAU 37 15 SEP 26 is currently generating about -0.26 per unit of volatility. If you would invest 9,858 in WPLAU 37 15 SEP 26 on September 5, 2024 and sell it today you would lose (86.00) from holding WPLAU 37 15 SEP 26 or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 51.22% |
| Values | Daily Returns |
Guangdong Investment Limited vs. WPLAU 37 15 SEP 26
Performance |
| Timeline |
| Guangdong Investment |
| WPLAU 37 15 |
Guangdong Investment and WPLAU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Investment and WPLAU
The main advantage of trading using opposite Guangdong Investment and WPLAU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment position performs unexpectedly, WPLAU 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 WPLAU will offset losses from the drop in WPLAU's long position.| Guangdong Investment vs. Artesian Resources | Guangdong Investment vs. Global Water Resources | Guangdong Investment vs. Essential Utilities | Guangdong Investment vs. American Water Works |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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