Correlation Between Allwin Telecommunicatio and Jizhong Energy
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By analyzing existing cross correlation between Allwin Telecommunication Co and Jizhong Energy Resources, you can compare the effects of market volatilities on Allwin Telecommunicatio and Jizhong Energy 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 Allwin Telecommunicatio with a short position of Jizhong Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allwin Telecommunicatio and Jizhong Energy.
Diversification Opportunities for Allwin Telecommunicatio and Jizhong Energy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allwin and Jizhong is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Allwin Telecommunication Co and Jizhong Energy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jizhong Energy Resources and Allwin Telecommunicatio 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 Allwin Telecommunication Co are associated (or correlated) with Jizhong Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jizhong Energy Resources has no effect on the direction of Allwin Telecommunicatio i.e., Allwin Telecommunicatio and Jizhong Energy go up and down completely randomly.
Pair Corralation between Allwin Telecommunicatio and Jizhong Energy
Assuming the 90 days trading horizon Allwin Telecommunication Co is expected to generate 2.04 times more return on investment than Jizhong Energy. However, Allwin Telecommunicatio is 2.04 times more volatile than Jizhong Energy Resources. It trades about 0.11 of its potential returns per unit of risk. Jizhong Energy Resources is currently generating about 0.17 per unit of risk. If you would invest 569.00 in Allwin Telecommunication Co on September 2, 2024 and sell it today you would earn a total of 38.00 from holding Allwin Telecommunication Co or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allwin Telecommunication Co vs. Jizhong Energy Resources
Performance |
| Timeline |
| Allwin Telecommunicatio |
| Jizhong Energy Resources |
Allwin Telecommunicatio and Jizhong Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allwin Telecommunicatio and Jizhong Energy
The main advantage of trading using opposite Allwin Telecommunicatio and Jizhong Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allwin Telecommunicatio position performs unexpectedly, Jizhong Energy 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 Jizhong Energy will offset losses from the drop in Jizhong Energy's long position.The idea behind Allwin Telecommunication Co and Jizhong Energy Resources 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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