Correlation Between China Longyuan and Jiangsu Pacific
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By analyzing existing cross correlation between China Longyuan Power and Jiangsu Pacific Quartz, you can compare the effects of market volatilities on China Longyuan and Jiangsu Pacific 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 China Longyuan with a short position of Jiangsu Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and Jiangsu Pacific.
Diversification Opportunities for China Longyuan and Jiangsu Pacific
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Jiangsu is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and Jiangsu Pacific Quartz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Pacific Quartz and China Longyuan 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 China Longyuan Power are associated (or correlated) with Jiangsu Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Pacific Quartz has no effect on the direction of China Longyuan i.e., China Longyuan and Jiangsu Pacific go up and down completely randomly.
Pair Corralation between China Longyuan and Jiangsu Pacific
Assuming the 90 days trading horizon China Longyuan Power is expected to generate 1.08 times more return on investment than Jiangsu Pacific. However, China Longyuan is 1.08 times more volatile than Jiangsu Pacific Quartz. It trades about -0.06 of its potential returns per unit of risk. Jiangsu Pacific Quartz is currently generating about -0.11 per unit of risk. If you would invest 1,790 in China Longyuan Power on August 27, 2024 and sell it today you would lose (79.00) from holding China Longyuan Power or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. Jiangsu Pacific Quartz
Performance |
| Timeline |
| China Longyuan Power |
| Jiangsu Pacific Quartz |
China Longyuan and Jiangsu Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and Jiangsu Pacific
The main advantage of trading using opposite China Longyuan and Jiangsu Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, Jiangsu Pacific 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 Pacific will offset losses from the drop in Jiangsu Pacific's long position.| China Longyuan vs. Ningbo Ligong Online | China Longyuan vs. Epoxy Base Electronic | China Longyuan vs. Southern PublishingMedia Co | China Longyuan vs. Changjiang Publishing Media |
| Jiangsu Pacific vs. Lutian Machinery Co | Jiangsu Pacific vs. China Longyuan Power | Jiangsu Pacific vs. Changshu Tongrun Auto | Jiangsu Pacific vs. PetroChina Co Ltd |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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