Correlation Between Gansu Jiu and Guangzhou Dongfang
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By analyzing existing cross correlation between Gansu Jiu Steel and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on Gansu Jiu and Guangzhou Dongfang 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 Gansu Jiu with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Guangzhou Dongfang.
Diversification Opportunities for Gansu Jiu and Guangzhou Dongfang
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Guangzhou is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Guangzhou Dongfang Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Dongfang Hotel and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with Guangzhou Dongfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Dongfang Hotel has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between Gansu Jiu and Guangzhou Dongfang
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 1.36 times more return on investment than Guangzhou Dongfang. However, Gansu Jiu is 1.36 times more volatile than Guangzhou Dongfang Hotel. It trades about 0.01 of its potential returns per unit of risk. Guangzhou Dongfang Hotel is currently generating about -0.07 per unit of risk. If you would invest 185.00 in Gansu Jiu Steel on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Gansu Jiu Steel or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Gansu Jiu Steel vs. Guangzhou Dongfang Hotel
Performance |
Timeline |
Gansu Jiu Steel |
Guangzhou Dongfang Hotel |
Gansu Jiu and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gansu Jiu and Guangzhou Dongfang
The main advantage of trading using opposite Gansu Jiu and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Guangzhou Dongfang 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 Dongfang will offset losses from the drop in Guangzhou Dongfang's long position.Gansu Jiu vs. Zijin Mining Group | Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Baoshan Iron Steel | Gansu Jiu vs. Rongsheng Petrochemical Co |
Guangzhou Dongfang vs. Lutian Machinery Co | Guangzhou Dongfang vs. PetroChina Co Ltd | Guangzhou Dongfang vs. Bank of China | Guangzhou Dongfang vs. Gansu Jiu Steel |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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