Correlation Between Guangdong Jingyi and Hangzhou Zhongya
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Hangzhou Zhongya Machinery, you can compare the effects of market volatilities on Guangdong Jingyi and Hangzhou Zhongya 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 Hangzhou Zhongya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Hangzhou Zhongya.
Diversification Opportunities for Guangdong Jingyi and Hangzhou Zhongya
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Hangzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Hangzhou Zhongya Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Zhongya Mac 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 Hangzhou Zhongya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Zhongya Mac has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Hangzhou Zhongya go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Hangzhou Zhongya
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to generate 0.71 times more return on investment than Hangzhou Zhongya. However, Guangdong Jingyi Metal is 1.4 times less risky than Hangzhou Zhongya. It trades about 0.25 of its potential returns per unit of risk. Hangzhou Zhongya Machinery is currently generating about 0.11 per unit of risk. If you would invest 518.00 in Guangdong Jingyi Metal on September 24, 2024 and sell it today you would earn a total of 243.00 from holding Guangdong Jingyi Metal or generate 46.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.36% |
Values | Daily Returns |
Guangdong Jingyi Metal vs. Hangzhou Zhongya Machinery
Performance |
Timeline |
Guangdong Jingyi Metal |
Hangzhou Zhongya Mac |
Guangdong Jingyi and Hangzhou Zhongya Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Jingyi and Hangzhou Zhongya
The main advantage of trading using opposite Guangdong Jingyi and Hangzhou Zhongya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Hangzhou Zhongya 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 Hangzhou Zhongya will offset losses from the drop in Hangzhou Zhongya's long position.Guangdong Jingyi vs. TongFu Microelectronics Co | Guangdong Jingyi vs. Qingdao Foods Co | Guangdong Jingyi vs. Unigroup Guoxin Microelectronics | Guangdong Jingyi vs. Leaguer Shenzhen MicroElectronics |
Hangzhou Zhongya vs. Lonkey Industrial Co | Hangzhou Zhongya vs. Hubei Xingfa Chemicals | Hangzhou Zhongya vs. Sichuan Yahua Industrial | Hangzhou Zhongya vs. Guangdong Jingyi 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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