Correlation Between TRON and Guangzhou Fangbang
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By analyzing existing cross correlation between TRON and Guangzhou Fangbang Electronics, you can compare the effects of market volatilities on TRON and Guangzhou Fangbang 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 TRON with a short position of Guangzhou Fangbang. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRON and Guangzhou Fangbang.
Diversification Opportunities for TRON and Guangzhou Fangbang
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between TRON and Guangzhou is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Guangzhou Fangbang Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Fangbang and TRON 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 TRON are associated (or correlated) with Guangzhou Fangbang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Fangbang has no effect on the direction of TRON i.e., TRON and Guangzhou Fangbang go up and down completely randomly.
Pair Corralation between TRON and Guangzhou Fangbang
Assuming the 90 days trading horizon TRON is expected to generate 1.9 times more return on investment than Guangzhou Fangbang. However, TRON is 1.9 times more volatile than Guangzhou Fangbang Electronics. It trades about 0.08 of its potential returns per unit of risk. Guangzhou Fangbang Electronics is currently generating about 0.0 per unit of risk. If you would invest 6.17 in TRON on October 16, 2024 and sell it today you would earn a total of 15.83 from holding TRON or generate 256.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 62.13% |
| Values | Daily Returns |
TRON vs. Guangzhou Fangbang Electronics
Performance |
| Timeline |
| TRON |
| Guangzhou Fangbang |
TRON and Guangzhou Fangbang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRON and Guangzhou Fangbang
The main advantage of trading using opposite TRON and Guangzhou Fangbang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON position performs unexpectedly, Guangzhou Fangbang 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 Guangzhou Fangbang will offset losses from the drop in Guangzhou Fangbang's long position.The idea behind TRON and Guangzhou Fangbang Electronics 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.| Guangzhou Fangbang vs. Universal Scientific Industrial | Guangzhou Fangbang vs. Jiaozuo Wanfang Aluminum | Guangzhou Fangbang vs. Porton Fine Chemicals | Guangzhou Fangbang vs. Shanghai Yanpu Metal |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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