Correlation Between Guangzhou Zhujiang and Dongguan Aohai
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Dongguan Aohai Technology, you can compare the effects of market volatilities on Guangzhou Zhujiang and Dongguan Aohai 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 Dongguan Aohai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Dongguan Aohai.
Diversification Opportunities for Guangzhou Zhujiang and Dongguan Aohai
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and Dongguan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Dongguan Aohai Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Aohai Technology 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 Dongguan Aohai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Aohai Technology has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Dongguan Aohai go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Dongguan Aohai
Assuming the 90 days trading horizon Guangzhou Zhujiang is expected to generate 1.85 times less return on investment than Dongguan Aohai. But when comparing it to its historical volatility, Guangzhou Zhujiang Brewery is 2.64 times less risky than Dongguan Aohai. It trades about 0.32 of its potential returns per unit of risk. Dongguan Aohai Technology is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,299 in Dongguan Aohai Technology on September 26, 2024 and sell it today you would earn a total of 708.00 from holding Dongguan Aohai Technology or generate 21.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Dongguan Aohai Technology
Performance |
Timeline |
Guangzhou Zhujiang |
Dongguan Aohai Technology |
Guangzhou Zhujiang and Dongguan Aohai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangzhou Zhujiang and Dongguan Aohai
The main advantage of trading using opposite Guangzhou Zhujiang and Dongguan Aohai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Dongguan Aohai 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 Dongguan Aohai will offset losses from the drop in Dongguan Aohai'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 |
Dongguan Aohai vs. Kweichow Moutai Co | Dongguan Aohai vs. Contemporary Amperex Technology | Dongguan Aohai vs. G bits Network Technology | Dongguan Aohai vs. BYD Co Ltd |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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