Correlation Between Jizhong Energy and AVIC Fund
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By analyzing existing cross correlation between Jizhong Energy Resources and AVIC Fund Management, you can compare the effects of market volatilities on Jizhong Energy and AVIC Fund 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 Jizhong Energy with a short position of AVIC Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jizhong Energy and AVIC Fund.
Diversification Opportunities for Jizhong Energy and AVIC Fund
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jizhong and AVIC is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jizhong Energy Resources and AVIC Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVIC Fund Management and Jizhong Energy 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 Jizhong Energy Resources are associated (or correlated) with AVIC Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVIC Fund Management has no effect on the direction of Jizhong Energy i.e., Jizhong Energy and AVIC Fund go up and down completely randomly.
Pair Corralation between Jizhong Energy and AVIC Fund
Assuming the 90 days trading horizon Jizhong Energy Resources is expected to generate 4.75 times more return on investment than AVIC Fund. However, Jizhong Energy is 4.75 times more volatile than AVIC Fund Management. It trades about 0.07 of its potential returns per unit of risk. AVIC Fund Management is currently generating about 0.21 per unit of risk. If you would invest 531.00 in Jizhong Energy Resources on October 22, 2024 and sell it today you would earn a total of 85.00 from holding Jizhong Energy Resources or generate 16.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jizhong Energy Resources vs. AVIC Fund Management
Performance |
| Timeline |
| Jizhong Energy Resources |
| AVIC Fund Management |
Jizhong Energy and AVIC Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jizhong Energy and AVIC Fund
The main advantage of trading using opposite Jizhong Energy and AVIC Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jizhong Energy position performs unexpectedly, AVIC Fund 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 AVIC Fund will offset losses from the drop in AVIC Fund's long position.The idea behind Jizhong Energy Resources and AVIC Fund Management 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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