Correlation Between Guangdong Jinma and Hefei Metalforming
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By analyzing existing cross correlation between Guangdong Jinma Entertainment and Hefei Metalforming Mach, you can compare the effects of market volatilities on Guangdong Jinma and Hefei Metalforming 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 Guangdong Jinma with a short position of Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jinma and Hefei Metalforming.
Diversification Opportunities for Guangdong Jinma and Hefei Metalforming
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Hefei is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jinma Entertainment and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach and Guangdong Jinma 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 Guangdong Jinma Entertainment are associated (or correlated) with Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of Guangdong Jinma i.e., Guangdong Jinma and Hefei Metalforming go up and down completely randomly.
Pair Corralation between Guangdong Jinma and Hefei Metalforming
Assuming the 90 days trading horizon Guangdong Jinma Entertainment is expected to generate 0.99 times more return on investment than Hefei Metalforming. However, Guangdong Jinma Entertainment is 1.01 times less risky than Hefei Metalforming. It trades about 0.01 of its potential returns per unit of risk. Hefei Metalforming Mach is currently generating about 0.0 per unit of risk. If you would invest 1,613 in Guangdong Jinma Entertainment on September 25, 2024 and sell it today you would lose (87.00) from holding Guangdong Jinma Entertainment or give up 5.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Jinma Entertainment vs. Hefei Metalforming Mach
Performance |
Timeline |
Guangdong Jinma Ente |
Hefei Metalforming Mach |
Guangdong Jinma and Hefei Metalforming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Jinma and Hefei Metalforming
The main advantage of trading using opposite Guangdong Jinma and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jinma position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.Guangdong Jinma vs. Luyin Investment Group | Guangdong Jinma vs. Zhonghong Pulin Medical | Guangdong Jinma vs. Jointo Energy Investment | Guangdong Jinma vs. Nuode Investment Co |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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