Correlation Between Jiangnan Mould and Shenyang Huitian
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By analyzing existing cross correlation between Jiangnan Mould Plastic and Shenyang Huitian Thermal, you can compare the effects of market volatilities on Jiangnan Mould and Shenyang Huitian 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 Jiangnan Mould with a short position of Shenyang Huitian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangnan Mould and Shenyang Huitian.
Diversification Opportunities for Jiangnan Mould and Shenyang Huitian
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangnan and Shenyang is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jiangnan Mould Plastic and Shenyang Huitian Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Huitian Thermal and Jiangnan Mould 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 Jiangnan Mould Plastic are associated (or correlated) with Shenyang Huitian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Huitian Thermal has no effect on the direction of Jiangnan Mould i.e., Jiangnan Mould and Shenyang Huitian go up and down completely randomly.
Pair Corralation between Jiangnan Mould and Shenyang Huitian
Assuming the 90 days trading horizon Jiangnan Mould Plastic is expected to generate 1.02 times more return on investment than Shenyang Huitian. However, Jiangnan Mould is 1.02 times more volatile than Shenyang Huitian Thermal. It trades about 0.04 of its potential returns per unit of risk. Shenyang Huitian Thermal is currently generating about 0.02 per unit of risk. If you would invest 496.00 in Jiangnan Mould Plastic on November 7, 2024 and sell it today you would earn a total of 195.00 from holding Jiangnan Mould Plastic or generate 39.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Jiangnan Mould Plastic vs. Shenyang Huitian Thermal
Performance |
| Timeline |
| Jiangnan Mould Plastic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenyang Huitian Thermal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jiangnan Mould and Shenyang Huitian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangnan Mould and Shenyang Huitian
The main advantage of trading using opposite Jiangnan Mould and Shenyang Huitian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangnan Mould position performs unexpectedly, Shenyang Huitian 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 Shenyang Huitian will offset losses from the drop in Shenyang Huitian's long position.The idea behind Jiangnan Mould Plastic and Shenyang Huitian Thermal 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.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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