Correlation Between Guangdong Skychem and China Construction
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By analyzing existing cross correlation between Guangdong Skychem Technology and China Construction Bank, you can compare the effects of market volatilities on Guangdong Skychem and China Construction 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 Skychem with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Skychem and China Construction.
Diversification Opportunities for Guangdong Skychem and China Construction
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and China is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Skychem Technology and China Construction Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Construction Bank and Guangdong Skychem 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 Skychem Technology are associated (or correlated) with China Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Construction Bank has no effect on the direction of Guangdong Skychem i.e., Guangdong Skychem and China Construction go up and down completely randomly.
Pair Corralation between Guangdong Skychem and China Construction
Assuming the 90 days trading horizon Guangdong Skychem Technology is expected to generate 3.36 times more return on investment than China Construction. However, Guangdong Skychem is 3.36 times more volatile than China Construction Bank. It trades about 0.28 of its potential returns per unit of risk. China Construction Bank is currently generating about 0.12 per unit of risk. If you would invest 5,992 in Guangdong Skychem Technology on September 24, 2024 and sell it today you would earn a total of 6,830 from holding Guangdong Skychem Technology or generate 113.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Skychem Technology vs. China Construction Bank
Performance |
Timeline |
Guangdong Skychem |
China Construction Bank |
Guangdong Skychem and China Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Skychem and China Construction
The main advantage of trading using opposite Guangdong Skychem and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Skychem position performs unexpectedly, China Construction 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 China Construction will offset losses from the drop in China Construction's long position.Guangdong Skychem vs. Industrial and Commercial | Guangdong Skychem vs. Kweichow Moutai Co | Guangdong Skychem vs. Agricultural Bank of | Guangdong Skychem vs. China Mobile Limited |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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