Correlation Between Heilongjiang Transport and Guangdong Shenglu
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By analyzing existing cross correlation between Heilongjiang Transport Development and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on Heilongjiang Transport 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 Heilongjiang Transport with a short position of Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Transport and Guangdong Shenglu.
Diversification Opportunities for Heilongjiang Transport and Guangdong Shenglu
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Heilongjiang and Guangdong is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Transport Develop and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu and Heilongjiang Transport 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 Heilongjiang Transport Development 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 Heilongjiang Transport i.e., Heilongjiang Transport and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between Heilongjiang Transport and Guangdong Shenglu
Assuming the 90 days trading horizon Heilongjiang Transport is expected to generate 1.18 times less return on investment than Guangdong Shenglu. But when comparing it to its historical volatility, Heilongjiang Transport Development is 1.24 times less risky than Guangdong Shenglu. It trades about 0.21 of its potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 535.00 in Guangdong Shenglu Telecommunication on September 13, 2024 and sell it today you would earn a total of 231.00 from holding Guangdong Shenglu Telecommunication or generate 43.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Heilongjiang Transport Develop vs. Guangdong Shenglu Telecommunic
Performance |
Timeline |
Heilongjiang Transport |
Guangdong Shenglu |
Heilongjiang Transport and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Heilongjiang Transport and Guangdong Shenglu
The main advantage of trading using opposite Heilongjiang Transport and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Transport 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.The idea behind Heilongjiang Transport Development and Guangdong Shenglu Telecommunication pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Guangdong Shenglu vs. Industrial and Commercial | Guangdong Shenglu vs. China Construction Bank | Guangdong Shenglu vs. Bank of China | Guangdong Shenglu vs. Agricultural Bank of |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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