Correlation Between Guangdong Jingyi and Huizhou Desay
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Huizhou Desay SV, you can compare the effects of market volatilities on Guangdong Jingyi and Huizhou Desay 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 Jingyi with a short position of Huizhou Desay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Huizhou Desay.
Diversification Opportunities for Guangdong Jingyi and Huizhou Desay
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Huizhou is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Huizhou Desay SV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huizhou Desay SV and Guangdong Jingyi 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 Jingyi Metal are associated (or correlated) with Huizhou Desay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huizhou Desay SV has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Huizhou Desay go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Huizhou Desay
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to generate 0.79 times more return on investment than Huizhou Desay. However, Guangdong Jingyi Metal is 1.26 times less risky than Huizhou Desay. It trades about 0.26 of its potential returns per unit of risk. Huizhou Desay SV is currently generating about 0.1 per unit of risk. If you would invest 506.00 in Guangdong Jingyi Metal on September 23, 2024 and sell it today you would earn a total of 255.00 from holding Guangdong Jingyi Metal or generate 50.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Jingyi Metal vs. Huizhou Desay SV
Performance |
Timeline |
Guangdong Jingyi Metal |
Huizhou Desay SV |
Guangdong Jingyi and Huizhou Desay Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Jingyi and Huizhou Desay
The main advantage of trading using opposite Guangdong Jingyi and Huizhou Desay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Huizhou Desay 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 Huizhou Desay will offset losses from the drop in Huizhou Desay's long position.Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Wanhua Chemical Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Shandong Gold Mining |
Huizhou Desay vs. Bank of China | Huizhou Desay vs. Kweichow Moutai Co | Huizhou Desay vs. PetroChina Co Ltd | Huizhou Desay vs. Bank of Communications |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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