Correlation Between Hangzhou Guotai and Guangdong Tianhe
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By analyzing existing cross correlation between Hangzhou Guotai Environmental and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on Hangzhou Guotai and Guangdong Tianhe 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 Hangzhou Guotai with a short position of Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Guotai and Guangdong Tianhe.
Diversification Opportunities for Hangzhou Guotai and Guangdong Tianhe
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hangzhou and Guangdong is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Guotai Environmental and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr and Hangzhou Guotai 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 Hangzhou Guotai Environmental are associated (or correlated) with Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of Hangzhou Guotai i.e., Hangzhou Guotai and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between Hangzhou Guotai and Guangdong Tianhe
Assuming the 90 days trading horizon Hangzhou Guotai Environmental is expected to generate 0.71 times more return on investment than Guangdong Tianhe. However, Hangzhou Guotai Environmental is 1.4 times less risky than Guangdong Tianhe. It trades about 0.02 of its potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about -0.28 per unit of risk. If you would invest 3,132 in Hangzhou Guotai Environmental on October 11, 2024 and sell it today you would earn a total of 14.00 from holding Hangzhou Guotai Environmental or generate 0.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hangzhou Guotai Environmental vs. Guangdong Tianhe Agricultural
Performance |
Timeline |
Hangzhou Guotai Envi |
Guangdong Tianhe Agr |
Hangzhou Guotai and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hangzhou Guotai and Guangdong Tianhe
The main advantage of trading using opposite Hangzhou Guotai and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Guotai position performs unexpectedly, Guangdong Tianhe 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 Guangdong Tianhe will offset losses from the drop in Guangdong Tianhe's long position.Hangzhou Guotai vs. Dongguan Tarry Electronics | Hangzhou Guotai vs. Ningbo Kangqiang Electronics | Hangzhou Guotai vs. China Minmetals Rare | Hangzhou Guotai vs. Shijiazhuang Tonhe Electronics |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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