Correlation Between Caihong Display and Guangdong Marubi
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By analyzing existing cross correlation between Caihong Display Devices and Guangdong Marubi Biotechnology, you can compare the effects of market volatilities on Caihong Display and Guangdong Marubi 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 Caihong Display with a short position of Guangdong Marubi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Guangdong Marubi.
Diversification Opportunities for Caihong Display and Guangdong Marubi
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Caihong and Guangdong is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Guangdong Marubi Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Marubi Bio and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Guangdong Marubi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Marubi Bio has no effect on the direction of Caihong Display i.e., Caihong Display and Guangdong Marubi go up and down completely randomly.
Pair Corralation between Caihong Display and Guangdong Marubi
Assuming the 90 days trading horizon Caihong Display is expected to generate 1.15 times less return on investment than Guangdong Marubi. But when comparing it to its historical volatility, Caihong Display Devices is 2.11 times less risky than Guangdong Marubi. It trades about 0.5 of its potential returns per unit of risk. Guangdong Marubi Biotechnology is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,781 in Guangdong Marubi Biotechnology on September 25, 2024 and sell it today you would earn a total of 630.00 from holding Guangdong Marubi Biotechnology or generate 22.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Caihong Display Devices vs. Guangdong Marubi Biotechnology
Performance |
Timeline |
Caihong Display Devices |
Guangdong Marubi Bio |
Caihong Display and Guangdong Marubi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Caihong Display and Guangdong Marubi
The main advantage of trading using opposite Caihong Display and Guangdong Marubi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Guangdong Marubi 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 Marubi will offset losses from the drop in Guangdong Marubi's long position.Caihong Display vs. Industrial and Commercial | Caihong Display vs. China Construction Bank | Caihong Display vs. Agricultural Bank of | Caihong Display vs. Bank of China |
Guangdong Marubi vs. Shanghai Jinfeng Wine | Guangdong Marubi vs. Guangdong Qunxing Toys | Guangdong Marubi vs. Caihong Display Devices | Guangdong Marubi vs. Runjian Communication Co |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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