Correlation Between North Chemical and Guangdong Qunxing
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By analyzing existing cross correlation between North Chemical Industries and Guangdong Qunxing Toys, you can compare the effects of market volatilities on North Chemical and Guangdong Qunxing 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 North Chemical with a short position of Guangdong Qunxing. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Chemical and Guangdong Qunxing.
Diversification Opportunities for North Chemical and Guangdong Qunxing
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between North and Guangdong is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding North Chemical Industries and Guangdong Qunxing Toys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Qunxing Toys and North Chemical 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 North Chemical Industries are associated (or correlated) with Guangdong Qunxing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Qunxing Toys has no effect on the direction of North Chemical i.e., North Chemical and Guangdong Qunxing go up and down completely randomly.
Pair Corralation between North Chemical and Guangdong Qunxing
Assuming the 90 days trading horizon North Chemical Industries is expected to under-perform the Guangdong Qunxing. But the stock apears to be less risky and, when comparing its historical volatility, North Chemical Industries is 1.18 times less risky than Guangdong Qunxing. The stock trades about -0.04 of its potential returns per unit of risk. The Guangdong Qunxing Toys is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 614.00 in Guangdong Qunxing Toys on October 22, 2024 and sell it today you would earn a total of 58.00 from holding Guangdong Qunxing Toys or generate 9.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
North Chemical Industries vs. Guangdong Qunxing Toys
Performance |
Timeline |
North Chemical Industries |
Guangdong Qunxing Toys |
North Chemical and Guangdong Qunxing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with North Chemical and Guangdong Qunxing
The main advantage of trading using opposite North Chemical and Guangdong Qunxing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Chemical position performs unexpectedly, Guangdong Qunxing 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 Qunxing will offset losses from the drop in Guangdong Qunxing's long position.North Chemical vs. Maoming Petro Chemical Shihua | North Chemical vs. Shenyang Chemical Industry | North Chemical vs. Wuxi Chemical Equipment | North Chemical vs. China Life Insurance |
Guangdong Qunxing vs. Weihai Honglin Electronic | Guangdong Qunxing vs. Xizi Clean Energy | Guangdong Qunxing vs. Fuzhou Rockchip Electronics | Guangdong Qunxing vs. Guangzhou Restaurants Group |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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