Correlation Between New Trend and Guangdong Shenglu
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By analyzing existing cross correlation between New Trend International and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on New Trend and Guangdong Shenglu 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 New Trend with a short position of Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Trend and Guangdong Shenglu.
Diversification Opportunities for New Trend and Guangdong Shenglu
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Guangdong is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding New Trend International and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu and New Trend 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 New Trend International are associated (or correlated) with Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of New Trend i.e., New Trend and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between New Trend and Guangdong Shenglu
Assuming the 90 days trading horizon New Trend International is expected to generate 1.52 times more return on investment than Guangdong Shenglu. However, New Trend is 1.52 times more volatile than Guangdong Shenglu Telecommunication. It trades about 0.12 of its potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about 0.15 per unit of risk. If you would invest 926.00 in New Trend International on September 23, 2024 and sell it today you would earn a total of 315.00 from holding New Trend International or generate 34.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
New Trend International vs. Guangdong Shenglu Telecommunic
Performance |
Timeline |
New Trend International |
Guangdong Shenglu |
New Trend and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Trend and Guangdong Shenglu
The main advantage of trading using opposite New Trend and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Trend position performs unexpectedly, Guangdong Shenglu 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 Guangdong Shenglu will offset losses from the drop in Guangdong Shenglu's long position.New Trend vs. Guangdong Shenglu Telecommunication | New Trend vs. Dhc Software Co | New Trend vs. Eastern Communications Co | New Trend vs. Jiangxi Hengda Hi Tech |
Guangdong Shenglu vs. Industrial and Commercial | Guangdong Shenglu vs. Agricultural Bank of | Guangdong Shenglu vs. China Construction Bank | Guangdong Shenglu vs. Bank of China |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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