Correlation Between Guangzhou Zhujiang and Guangzhou Dongfang
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on Guangzhou Zhujiang and Guangzhou Dongfang 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 Zhujiang with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Guangzhou Dongfang.
Diversification Opportunities for Guangzhou Zhujiang and Guangzhou Dongfang
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Guangzhou is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Guangzhou Dongfang Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Dongfang Hotel and Guangzhou Zhujiang 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 Zhujiang Brewery are associated (or correlated) with Guangzhou Dongfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Dongfang Hotel has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Guangzhou Dongfang
Assuming the 90 days trading horizon Guangzhou Zhujiang Brewery is expected to generate 0.75 times more return on investment than Guangzhou Dongfang. However, Guangzhou Zhujiang Brewery is 1.32 times less risky than Guangzhou Dongfang. It trades about 0.09 of its potential returns per unit of risk. Guangzhou Dongfang Hotel is currently generating about 0.07 per unit of risk. If you would invest 885.00 in Guangzhou Zhujiang Brewery on September 26, 2024 and sell it today you would earn a total of 101.00 from holding Guangzhou Zhujiang Brewery or generate 11.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Guangzhou Dongfang Hotel
Performance |
Timeline |
Guangzhou Zhujiang |
Guangzhou Dongfang Hotel |
Guangzhou Zhujiang and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangzhou Zhujiang and Guangzhou Dongfang
The main advantage of trading using opposite Guangzhou Zhujiang and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Guangzhou Dongfang 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 Guangzhou Dongfang will offset losses from the drop in Guangzhou Dongfang's long position.Guangzhou Zhujiang vs. BYD Co Ltd | Guangzhou Zhujiang vs. China Mobile Limited | Guangzhou Zhujiang vs. Agricultural Bank of | Guangzhou Zhujiang vs. Industrial and Commercial |
Guangzhou Dongfang vs. Bank of China | Guangzhou Dongfang vs. Kweichow Moutai Co | Guangzhou Dongfang vs. PetroChina Co Ltd | Guangzhou Dongfang vs. Bank of Communications |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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