Correlation Between King Strong and Guangzhou Dongfang
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By analyzing existing cross correlation between King Strong New Material and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on King Strong 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 King Strong with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Strong and Guangzhou Dongfang.
Diversification Opportunities for King Strong and Guangzhou Dongfang
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between King and Guangzhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding King Strong New Material 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 King Strong 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 King Strong New Material 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 King Strong i.e., King Strong and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between King Strong and Guangzhou Dongfang
Assuming the 90 days trading horizon King Strong is expected to generate 1.4 times less return on investment than Guangzhou Dongfang. In addition to that, King Strong is 1.1 times more volatile than Guangzhou Dongfang Hotel. It trades about 0.04 of its total potential returns per unit of risk. Guangzhou Dongfang Hotel is currently generating about 0.06 per unit of volatility. If you would invest 979.00 in Guangzhou Dongfang Hotel on September 26, 2024 and sell it today you would earn a total of 28.00 from holding Guangzhou Dongfang Hotel or generate 2.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
King Strong New Material vs. Guangzhou Dongfang Hotel
Performance |
Timeline |
King Strong New |
Guangzhou Dongfang Hotel |
King Strong and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with King Strong and Guangzhou Dongfang
The main advantage of trading using opposite King Strong and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Strong 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.King Strong vs. Bank of China | King Strong vs. Kweichow Moutai Co | King Strong vs. PetroChina Co Ltd | King Strong vs. Bank of Communications |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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