Correlation Between Gansu Jiu and Qumei Furniture
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By analyzing existing cross correlation between Gansu Jiu Steel and Qumei Furniture Group, you can compare the effects of market volatilities on Gansu Jiu and Qumei Furniture 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 Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Qumei Furniture.
Diversification Opportunities for Gansu Jiu and Qumei Furniture
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gansu and Qumei is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Qumei Furniture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qumei Furniture Group 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 Qumei Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qumei Furniture Group has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Qumei Furniture go up and down completely randomly.
Pair Corralation between Gansu Jiu and Qumei Furniture
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 1.04 times less return on investment than Qumei Furniture. In addition to that, Gansu Jiu is 1.11 times more volatile than Qumei Furniture Group. It trades about 0.2 of its total potential returns per unit of risk. Qumei Furniture Group is currently generating about 0.23 per unit of volatility. If you would invest 223.00 in Qumei Furniture Group on September 12, 2024 and sell it today you would earn a total of 127.00 from holding Qumei Furniture Group or generate 56.95% 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. Qumei Furniture Group
Performance |
Timeline |
Gansu Jiu Steel |
Qumei Furniture Group |
Gansu Jiu and Qumei Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gansu Jiu and Qumei Furniture
The main advantage of trading using opposite Gansu Jiu and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Qumei Furniture 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 Qumei Furniture will offset losses from the drop in Qumei Furniture'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 |
Qumei Furniture vs. Lutian Machinery Co | Qumei Furniture vs. PetroChina Co Ltd | Qumei Furniture vs. Bank of China | Qumei Furniture 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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