Correlation Between Guangzhou Haige and Kuang Chi
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By analyzing existing cross correlation between Guangzhou Haige Communications and Kuang Chi Technologies, you can compare the effects of market volatilities on Guangzhou Haige 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 Guangzhou Haige with a short position of Kuang Chi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Kuang Chi.
Diversification Opportunities for Guangzhou Haige and Kuang Chi
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Kuang is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications 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 Guangzhou Haige 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 Haige Communications 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 Guangzhou Haige i.e., Guangzhou Haige and Kuang Chi go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Kuang Chi
Assuming the 90 days trading horizon Guangzhou Haige is expected to generate 6.49 times less return on investment than Kuang Chi. But when comparing it to its historical volatility, Guangzhou Haige Communications is 1.32 times less risky than Kuang Chi. It trades about 0.05 of its potential returns per unit of risk. Kuang Chi Technologies is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,695 in Kuang Chi Technologies on September 25, 2024 and sell it today you would earn a total of 2,701 from holding Kuang Chi Technologies or generate 159.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Guangzhou Haige Communications vs. Kuang Chi Technologies
Performance |
Timeline |
Guangzhou Haige Comm |
Kuang Chi Technologies |
Guangzhou Haige and Kuang Chi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangzhou Haige and Kuang Chi
The main advantage of trading using opposite Guangzhou Haige and Kuang Chi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige 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.Guangzhou Haige vs. Industrial and Commercial | Guangzhou Haige vs. Agricultural Bank of | Guangzhou Haige vs. China Construction Bank | Guangzhou Haige 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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