Correlation Between Jiaozuo Wanfang and Jiangsu GDK
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By analyzing existing cross correlation between Jiaozuo Wanfang Aluminum and Jiangsu GDK Biotechnology, you can compare the effects of market volatilities on Jiaozuo Wanfang and Jiangsu GDK 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 GDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiaozuo Wanfang and Jiangsu GDK.
Diversification Opportunities for Jiaozuo Wanfang and Jiangsu GDK
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiaozuo and Jiangsu is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jiaozuo Wanfang Aluminum and Jiangsu GDK Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu GDK Biotechnology 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 GDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu GDK Biotechnology has no effect on the direction of Jiaozuo Wanfang i.e., Jiaozuo Wanfang and Jiangsu GDK go up and down completely randomly.
Pair Corralation between Jiaozuo Wanfang and Jiangsu GDK
Assuming the 90 days trading horizon Jiaozuo Wanfang Aluminum is expected to under-perform the Jiangsu GDK. But the stock apears to be less risky and, when comparing its historical volatility, Jiaozuo Wanfang Aluminum is 1.25 times less risky than Jiangsu GDK. The stock trades about -0.06 of its potential returns per unit of risk. The Jiangsu GDK Biotechnology is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,604 in Jiangsu GDK Biotechnology on September 13, 2024 and sell it today you would lose (34.00) from holding Jiangsu GDK Biotechnology or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiaozuo Wanfang Aluminum vs. Jiangsu GDK Biotechnology
Performance |
| Timeline |
| Jiaozuo Wanfang Aluminum |
| Jiangsu GDK Biotechnology |
Jiaozuo Wanfang and Jiangsu GDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiaozuo Wanfang and Jiangsu GDK
The main advantage of trading using opposite Jiaozuo Wanfang and Jiangsu GDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiaozuo Wanfang position performs unexpectedly, Jiangsu GDK 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 GDK will offset losses from the drop in Jiangsu GDK's long position.| Jiaozuo Wanfang vs. Zijin Mining Group | Jiaozuo Wanfang vs. Wanhua Chemical Group | Jiaozuo Wanfang vs. Baoshan Iron Steel | Jiaozuo Wanfang vs. Shandong Gold Mining |
| Jiangsu GDK vs. Industrial and Commercial | Jiangsu GDK vs. China Construction Bank | Jiangsu GDK vs. Bank of China | Jiangsu GDK vs. Agricultural Bank of |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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