Correlation Between Guangzhou Haige and Longjian Road
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By analyzing existing cross correlation between Guangzhou Haige Communications and Longjian Road Bridge, you can compare the effects of market volatilities on Guangzhou Haige and Longjian Road 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 Longjian Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Longjian Road.
Diversification Opportunities for Guangzhou Haige and Longjian Road
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and Longjian is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Longjian Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longjian Road Bridge 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 Longjian Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longjian Road Bridge has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Longjian Road go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Longjian Road
Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to under-perform the Longjian Road. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Haige Communications is 1.93 times less risky than Longjian Road. The stock trades about -0.43 of its potential returns per unit of risk. The Longjian Road Bridge is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 431.00 in Longjian Road Bridge on October 9, 2024 and sell it today you would lose (54.00) from holding Longjian Road Bridge or give up 12.53% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Guangzhou Haige Communications vs. Longjian Road Bridge
Performance |
Timeline |
Guangzhou Haige Comm |
Longjian Road Bridge |
Guangzhou Haige and Longjian Road Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangzhou Haige and Longjian Road
The main advantage of trading using opposite Guangzhou Haige and Longjian Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Longjian Road 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 Longjian Road will offset losses from the drop in Longjian Road's long position.Guangzhou Haige vs. Allwin Telecommunication Co | Guangzhou Haige vs. Nanjing Putian Telecommunications | Guangzhou Haige vs. Telling Telecommunication Holding | Guangzhou Haige vs. Runjian Communication Co |
Longjian Road vs. Chongqing Road Bridge | Longjian Road vs. Jiangsu Phoenix Publishing | Longjian Road vs. Hubeiyichang Transportation Group | Longjian Road vs. Sichuan Fulin Transportation |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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