Correlation Between Haima Automobile and Jiangxi Lianchuang
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By analyzing existing cross correlation between Haima Automobile Group and Jiangxi Lianchuang Opto electronic, you can compare the effects of market volatilities on Haima Automobile and Jiangxi Lianchuang 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 Haima Automobile with a short position of Jiangxi Lianchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haima Automobile and Jiangxi Lianchuang.
Diversification Opportunities for Haima Automobile and Jiangxi Lianchuang
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haima and Jiangxi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Haima Automobile Group and Jiangxi Lianchuang Opto electr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Lianchuang Opto and Haima Automobile 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 Haima Automobile Group are associated (or correlated) with Jiangxi Lianchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Lianchuang Opto has no effect on the direction of Haima Automobile i.e., Haima Automobile and Jiangxi Lianchuang go up and down completely randomly.
Pair Corralation between Haima Automobile and Jiangxi Lianchuang
Assuming the 90 days trading horizon Haima Automobile Group is expected to under-perform the Jiangxi Lianchuang. In addition to that, Haima Automobile is 1.02 times more volatile than Jiangxi Lianchuang Opto electronic. It trades about -0.27 of its total potential returns per unit of risk. Jiangxi Lianchuang Opto electronic is currently generating about 0.06 per unit of volatility. If you would invest 4,445 in Jiangxi Lianchuang Opto electronic on October 19, 2024 and sell it today you would earn a total of 149.00 from holding Jiangxi Lianchuang Opto electronic or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haima Automobile Group vs. Jiangxi Lianchuang Opto electr
Performance |
| Timeline |
| Haima Automobile |
| Jiangxi Lianchuang Opto |
Haima Automobile and Jiangxi Lianchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haima Automobile and Jiangxi Lianchuang
The main advantage of trading using opposite Haima Automobile and Jiangxi Lianchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haima Automobile position performs unexpectedly, Jiangxi Lianchuang 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 Jiangxi Lianchuang will offset losses from the drop in Jiangxi Lianchuang's long position.The idea behind Haima Automobile Group and Jiangxi Lianchuang Opto electronic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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