Correlation Between Jiaozuo Wanfang and Jiangsu Yanghe
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By analyzing existing cross correlation between Jiaozuo Wanfang Aluminum and Jiangsu Yanghe Brewery, you can compare the effects of market volatilities on Jiaozuo Wanfang and Jiangsu Yanghe 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 Jiaozuo Wanfang with a short position of Jiangsu Yanghe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiaozuo Wanfang and Jiangsu Yanghe.
Diversification Opportunities for Jiaozuo Wanfang and Jiangsu Yanghe
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jiaozuo and Jiangsu is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Jiaozuo Wanfang Aluminum and Jiangsu Yanghe Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Yanghe Brewery and Jiaozuo Wanfang 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 Jiaozuo Wanfang Aluminum are associated (or correlated) with Jiangsu Yanghe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Yanghe Brewery has no effect on the direction of Jiaozuo Wanfang i.e., Jiaozuo Wanfang and Jiangsu Yanghe go up and down completely randomly.
Pair Corralation between Jiaozuo Wanfang and Jiangsu Yanghe
Assuming the 90 days trading horizon Jiaozuo Wanfang Aluminum is expected to generate 1.65 times more return on investment than Jiangsu Yanghe. However, Jiaozuo Wanfang is 1.65 times more volatile than Jiangsu Yanghe Brewery. It trades about -0.11 of its potential returns per unit of risk. Jiangsu Yanghe Brewery is currently generating about -0.26 per unit of risk. If you would invest 716.00 in Jiaozuo Wanfang Aluminum on October 12, 2024 and sell it today you would lose (37.00) from holding Jiaozuo Wanfang Aluminum or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiaozuo Wanfang Aluminum vs. Jiangsu Yanghe Brewery
Performance |
| Timeline |
| Jiaozuo Wanfang Aluminum |
| Jiangsu Yanghe Brewery |
Jiaozuo Wanfang and Jiangsu Yanghe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiaozuo Wanfang and Jiangsu Yanghe
The main advantage of trading using opposite Jiaozuo Wanfang and Jiangsu Yanghe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiaozuo Wanfang position performs unexpectedly, Jiangsu Yanghe 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 Jiangsu Yanghe will offset losses from the drop in Jiangsu Yanghe's long position.| Jiaozuo Wanfang vs. Tongyu Communication | Jiaozuo Wanfang vs. Wuhan Yangtze Communication | Jiaozuo Wanfang vs. Shenzhen Kexin Communication | Jiaozuo Wanfang vs. Mingchen Health Co |
| Jiangsu Yanghe vs. Jiangyin Haida Rubber | Jiangsu Yanghe vs. Southchip Semiconductor Technology | Jiangsu Yanghe vs. StarPower Semiconductor | Jiangsu Yanghe vs. Shanghai Phichem Material |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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