Correlation Between Guangdong Shenglu and Kuang Chi
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Kuang Chi Technologies, you can compare the effects of market volatilities on Guangdong Shenglu and Kuang Chi 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 Shenglu with a short position of Kuang Chi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Kuang Chi.
Diversification Opportunities for Guangdong Shenglu and Kuang Chi
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Kuang is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Kuang Chi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuang Chi Technologies and Guangdong Shenglu 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 Shenglu Telecommunication are associated (or correlated) with Kuang Chi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuang Chi Technologies has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Kuang Chi go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Kuang Chi
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to under-perform the Kuang Chi. In addition to that, Guangdong Shenglu is 1.02 times more volatile than Kuang Chi Technologies. It trades about -0.02 of its total potential returns per unit of risk. Kuang Chi Technologies is currently generating about 0.2 per unit of volatility. If you would invest 4,005 in Kuang Chi Technologies on September 25, 2024 and sell it today you would earn a total of 407.00 from holding Kuang Chi Technologies or generate 10.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Kuang Chi Technologies
Performance |
Timeline |
Guangdong Shenglu |
Kuang Chi Technologies |
Guangdong Shenglu and Kuang Chi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Shenglu and Kuang Chi
The main advantage of trading using opposite Guangdong Shenglu and Kuang Chi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Kuang Chi 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 Kuang Chi will offset losses from the drop in Kuang Chi's long position.Guangdong Shenglu vs. Industrial and Commercial | Guangdong Shenglu vs. Agricultural Bank of | Guangdong Shenglu vs. China Construction Bank | Guangdong Shenglu vs. Bank of China |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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