Correlation Between Central Plains and Guangzhou Zhujiang
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By analyzing existing cross correlation between Central Plains Environment and Guangzhou Zhujiang Brewery, you can compare the effects of market volatilities on Central Plains and Guangzhou Zhujiang 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 Central Plains with a short position of Guangzhou Zhujiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Plains and Guangzhou Zhujiang.
Diversification Opportunities for Central Plains and Guangzhou Zhujiang
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Central and Guangzhou is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Central Plains Environment and Guangzhou Zhujiang Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Zhujiang and Central Plains 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 Central Plains Environment are associated (or correlated) with Guangzhou Zhujiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Zhujiang has no effect on the direction of Central Plains i.e., Central Plains and Guangzhou Zhujiang go up and down completely randomly.
Pair Corralation between Central Plains and Guangzhou Zhujiang
Assuming the 90 days trading horizon Central Plains Environment is expected to generate 1.1 times more return on investment than Guangzhou Zhujiang. However, Central Plains is 1.1 times more volatile than Guangzhou Zhujiang Brewery. It trades about 0.19 of its potential returns per unit of risk. Guangzhou Zhujiang Brewery is currently generating about 0.09 per unit of risk. If you would invest 696.00 in Central Plains Environment on September 13, 2024 and sell it today you would earn a total of 199.00 from holding Central Plains Environment or generate 28.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Central Plains Environment vs. Guangzhou Zhujiang Brewery
Performance |
Timeline |
Central Plains Envir |
Guangzhou Zhujiang |
Central Plains and Guangzhou Zhujiang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Central Plains and Guangzhou Zhujiang
The main advantage of trading using opposite Central Plains and Guangzhou Zhujiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Plains position performs unexpectedly, Guangzhou Zhujiang 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 Zhujiang will offset losses from the drop in Guangzhou Zhujiang's long position.Central Plains vs. Guangzhou Zhujiang Brewery | Central Plains vs. Great Sun Foods Co | Central Plains vs. Shantou Wanshun Package | Central Plains vs. Fujian Anjoy Foods |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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