Correlation Between Shanghai Action and Guangzhou Dongfang
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By analyzing existing cross correlation between Shanghai Action Education and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on Shanghai Action and Guangzhou Dongfang 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 Shanghai Action with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Action and Guangzhou Dongfang.
Diversification Opportunities for Shanghai Action and Guangzhou Dongfang
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Guangzhou is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Action Education and Guangzhou Dongfang Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Dongfang Hotel and Shanghai Action 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 Shanghai Action Education are associated (or correlated) with Guangzhou Dongfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Dongfang Hotel has no effect on the direction of Shanghai Action i.e., Shanghai Action and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between Shanghai Action and Guangzhou Dongfang
Assuming the 90 days trading horizon Shanghai Action is expected to generate 2.52 times less return on investment than Guangzhou Dongfang. In addition to that, Shanghai Action is 1.27 times more volatile than Guangzhou Dongfang Hotel. It trades about 0.06 of its total potential returns per unit of risk. Guangzhou Dongfang Hotel is currently generating about 0.19 per unit of volatility. If you would invest 979.00 in Guangzhou Dongfang Hotel on September 24, 2024 and sell it today you would earn a total of 91.00 from holding Guangzhou Dongfang Hotel or generate 9.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Shanghai Action Education vs. Guangzhou Dongfang Hotel
Performance |
Timeline |
Shanghai Action Education |
Guangzhou Dongfang Hotel |
Shanghai Action and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Action and Guangzhou Dongfang
The main advantage of trading using opposite Shanghai Action and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Action position performs unexpectedly, Guangzhou Dongfang 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 Guangzhou Dongfang will offset losses from the drop in Guangzhou Dongfang's long position.Shanghai Action vs. Harvest Fund Management | Shanghai Action vs. Anyang Iron Steel | Shanghai Action vs. Beijing SPC Environment | Shanghai Action vs. AVIC Fund Management |
Guangzhou Dongfang vs. Eastroc Beverage Group | Guangzhou Dongfang vs. Southern PublishingMedia Co | Guangzhou Dongfang vs. Shanghai Action Education | Guangzhou Dongfang vs. Xinjiang Tianrun Dairy |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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