Correlation Between Guangdong Shenglu and Huaneng Lancang
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Huaneng Lancang River, you can compare the effects of market volatilities on Guangdong Shenglu and Huaneng Lancang 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 Huaneng Lancang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Huaneng Lancang.
Diversification Opportunities for Guangdong Shenglu and Huaneng Lancang
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Guangdong and Huaneng is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Huaneng Lancang River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaneng Lancang River 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 Huaneng Lancang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaneng Lancang River has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Huaneng Lancang go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Huaneng Lancang
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to under-perform the Huaneng Lancang. In addition to that, Guangdong Shenglu is 1.95 times more volatile than Huaneng Lancang River. It trades about -0.02 of its total potential returns per unit of risk. Huaneng Lancang River is currently generating about 0.2 per unit of volatility. If you would invest 930.00 in Huaneng Lancang River on September 26, 2024 and sell it today you would earn a total of 50.00 from holding Huaneng Lancang River or generate 5.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Huaneng Lancang River
Performance |
Timeline |
Guangdong Shenglu |
Huaneng Lancang River |
Guangdong Shenglu and Huaneng Lancang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Shenglu and Huaneng Lancang
The main advantage of trading using opposite Guangdong Shenglu and Huaneng Lancang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Huaneng Lancang 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 Huaneng Lancang will offset losses from the drop in Huaneng Lancang's long position.Guangdong Shenglu vs. Dongfeng Automobile Co | Guangdong Shenglu vs. China Mobile Limited | Guangdong Shenglu vs. Railway Signal Communication | Guangdong Shenglu vs. Dareway Software Co |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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