Correlation Between Guangzhou KingTeller and Beijing Sanyuan
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By analyzing existing cross correlation between Guangzhou KingTeller Technology and Beijing Sanyuan Foods, you can compare the effects of market volatilities on Guangzhou KingTeller and Beijing Sanyuan 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 Guangzhou KingTeller with a short position of Beijing Sanyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KingTeller and Beijing Sanyuan.
Diversification Opportunities for Guangzhou KingTeller and Beijing Sanyuan
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Beijing is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KingTeller Technolog and Beijing Sanyuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Sanyuan Foods and Guangzhou KingTeller 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 Guangzhou KingTeller Technology are associated (or correlated) with Beijing Sanyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Sanyuan Foods has no effect on the direction of Guangzhou KingTeller i.e., Guangzhou KingTeller and Beijing Sanyuan go up and down completely randomly.
Pair Corralation between Guangzhou KingTeller and Beijing Sanyuan
Assuming the 90 days trading horizon Guangzhou KingTeller Technology is expected to under-perform the Beijing Sanyuan. In addition to that, Guangzhou KingTeller is 1.96 times more volatile than Beijing Sanyuan Foods. It trades about -0.06 of its total potential returns per unit of risk. Beijing Sanyuan Foods is currently generating about -0.04 per unit of volatility. If you would invest 425.00 in Beijing Sanyuan Foods on December 10, 2024 and sell it today you would lose (5.00) from holding Beijing Sanyuan Foods or give up 1.18% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Guangzhou KingTeller Technolog vs. Beijing Sanyuan Foods
Performance |
Timeline |
Guangzhou KingTeller |
Beijing Sanyuan Foods |
Guangzhou KingTeller and Beijing Sanyuan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangzhou KingTeller and Beijing Sanyuan
The main advantage of trading using opposite Guangzhou KingTeller and Beijing Sanyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KingTeller position performs unexpectedly, Beijing Sanyuan 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 Beijing Sanyuan will offset losses from the drop in Beijing Sanyuan's long position.The idea behind Guangzhou KingTeller Technology and Beijing Sanyuan Foods 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.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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