Correlation Between Gansu Jiu and Kuangda Technology
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By analyzing existing cross correlation between Gansu Jiu Steel and Kuangda Technology Group, you can compare the effects of market volatilities on Gansu Jiu and Kuangda Technology 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 Gansu Jiu with a short position of Kuangda Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Kuangda Technology.
Diversification Opportunities for Gansu Jiu and Kuangda Technology
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gansu and Kuangda is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Kuangda Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuangda Technology and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with Kuangda Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuangda Technology has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Kuangda Technology go up and down completely randomly.
Pair Corralation between Gansu Jiu and Kuangda Technology
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 1.06 times more return on investment than Kuangda Technology. However, Gansu Jiu is 1.06 times more volatile than Kuangda Technology Group. It trades about 0.2 of its potential returns per unit of risk. Kuangda Technology Group is currently generating about 0.21 per unit of risk. If you would invest 121.00 in Gansu Jiu Steel on September 12, 2024 and sell it today you would earn a total of 64.00 from holding Gansu Jiu Steel or generate 52.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Gansu Jiu Steel vs. Kuangda Technology Group
Performance |
Timeline |
Gansu Jiu Steel |
Kuangda Technology |
Gansu Jiu and Kuangda Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gansu Jiu and Kuangda Technology
The main advantage of trading using opposite Gansu Jiu and Kuangda Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Kuangda Technology 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 Kuangda Technology will offset losses from the drop in Kuangda Technology's long position.Gansu Jiu vs. Zijin Mining Group | Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Baoshan Iron Steel | Gansu Jiu vs. Rongsheng Petrochemical Co |
Kuangda Technology vs. Lutian Machinery Co | Kuangda Technology vs. PetroChina Co Ltd | Kuangda Technology vs. Bank of China | Kuangda Technology vs. Gansu Jiu Steel |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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