Correlation Between Jiangnan Mould and Guangdong Tianhe
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By analyzing existing cross correlation between Jiangnan Mould Plastic and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on Jiangnan Mould and Guangdong Tianhe 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 Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangnan Mould and Guangdong Tianhe.
Diversification Opportunities for Jiangnan Mould and Guangdong Tianhe
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangnan and Guangdong is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Jiangnan Mould Plastic and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr 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 Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of Jiangnan Mould i.e., Jiangnan Mould and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between Jiangnan Mould and Guangdong Tianhe
Assuming the 90 days trading horizon Jiangnan Mould is expected to generate 1.22 times less return on investment than Guangdong Tianhe. But when comparing it to its historical volatility, Jiangnan Mould Plastic is 1.2 times less risky than Guangdong Tianhe. It trades about 0.19 of its potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 573.00 in Guangdong Tianhe Agricultural on November 8, 2024 and sell it today you would earn a total of 34.00 from holding Guangdong Tianhe Agricultural or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangnan Mould Plastic vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| Jiangnan Mould Plastic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangdong Tianhe Agr |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jiangnan Mould and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangnan Mould and Guangdong Tianhe
The main advantage of trading using opposite Jiangnan Mould and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangnan Mould position performs unexpectedly, Guangdong Tianhe 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 Guangdong Tianhe will offset losses from the drop in Guangdong Tianhe's long position.The idea behind Jiangnan Mould Plastic and Guangdong Tianhe Agricultural 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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