Correlation Between Guangzhou Haige and Shanghai Rongtai
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By analyzing existing cross correlation between Guangzhou Haige Communications and Shanghai Rongtai Health, you can compare the effects of market volatilities on Guangzhou Haige and Shanghai Rongtai 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 Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Shanghai Rongtai.
Diversification Opportunities for Guangzhou Haige and Shanghai Rongtai
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and Shanghai is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health 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 Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Shanghai Rongtai
Assuming the 90 days trading horizon Guangzhou Haige is expected to generate 1.98 times less return on investment than Shanghai Rongtai. But when comparing it to its historical volatility, Guangzhou Haige Communications is 1.53 times less risky than Shanghai Rongtai. It trades about 0.15 of its potential returns per unit of risk. Shanghai Rongtai Health is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,524 in Shanghai Rongtai Health on December 10, 2024 and sell it today you would earn a total of 183.00 from holding Shanghai Rongtai Health or generate 12.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Guangzhou Haige Communications vs. Shanghai Rongtai Health
Performance |
Timeline |
Guangzhou Haige Comm |
Shanghai Rongtai Health |
Guangzhou Haige and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangzhou Haige and Shanghai Rongtai
The main advantage of trading using opposite Guangzhou Haige and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Shanghai Rongtai 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 Shanghai Rongtai will offset losses from the drop in Shanghai Rongtai's long position.Guangzhou Haige vs. Shandong Sinoglory Health | Guangzhou Haige vs. Aier Eye Hospital | Guangzhou Haige vs. De Rucci Healthy | Guangzhou Haige vs. Shanghai Rongtai Health |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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