Correlation Between Gansu Huangtai and Jiangxi Selon
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By analyzing existing cross correlation between Gansu Huangtai Wine marketing and Jiangxi Selon Industrial, you can compare the effects of market volatilities on Gansu Huangtai and Jiangxi Selon 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 Gansu Huangtai with a short position of Jiangxi Selon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Huangtai and Jiangxi Selon.
Diversification Opportunities for Gansu Huangtai and Jiangxi Selon
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Jiangxi is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Huangtai Wine marketing and Jiangxi Selon Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Selon Industrial and Gansu Huangtai 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 Gansu Huangtai Wine marketing are associated (or correlated) with Jiangxi Selon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Selon Industrial has no effect on the direction of Gansu Huangtai i.e., Gansu Huangtai and Jiangxi Selon go up and down completely randomly.
Pair Corralation between Gansu Huangtai and Jiangxi Selon
Assuming the 90 days trading horizon Gansu Huangtai Wine marketing is expected to generate 1.8 times more return on investment than Jiangxi Selon. However, Gansu Huangtai is 1.8 times more volatile than Jiangxi Selon Industrial. It trades about -0.03 of its potential returns per unit of risk. Jiangxi Selon Industrial is currently generating about -0.06 per unit of risk. If you would invest 1,526 in Gansu Huangtai Wine marketing on November 7, 2024 and sell it today you would lose (50.00) from holding Gansu Huangtai Wine marketing or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Huangtai Wine marketing vs. Jiangxi Selon Industrial
Performance |
| Timeline |
| Gansu Huangtai Wine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jiangxi Selon Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Gansu Huangtai and Jiangxi Selon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Huangtai and Jiangxi Selon
The main advantage of trading using opposite Gansu Huangtai and Jiangxi Selon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Huangtai position performs unexpectedly, Jiangxi Selon 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 Jiangxi Selon will offset losses from the drop in Jiangxi Selon's long position.The idea behind Gansu Huangtai Wine marketing and Jiangxi Selon Industrial 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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