Correlation Between Guangdong Jingyi and Liaoning Chengda
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Guangdong Jingyi and Liaoning Chengda 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 Guangdong Jingyi with a short position of Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Liaoning Chengda.
Diversification Opportunities for Guangdong Jingyi and Liaoning Chengda
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Liaoning is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio and Guangdong Jingyi 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 Guangdong Jingyi Metal are associated (or correlated) with Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Liaoning Chengda
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to generate 1.8 times more return on investment than Liaoning Chengda. However, Guangdong Jingyi is 1.8 times more volatile than Liaoning Chengda Biotechnology. It trades about 0.01 of its potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about -0.02 per unit of risk. If you would invest 757.00 in Guangdong Jingyi Metal on September 3, 2024 and sell it today you would lose (21.00) from holding Guangdong Jingyi Metal or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| Liaoning Chengda Bio |
Guangdong Jingyi and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and Liaoning Chengda
The main advantage of trading using opposite Guangdong Jingyi and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.| Guangdong Jingyi vs. Zijin Mining Group | Guangdong Jingyi vs. Baoshan Iron Steel | Guangdong Jingyi vs. Rongsheng Petrochemical Co | Guangdong Jingyi vs. Hoshine Silicon Ind |
| Liaoning Chengda vs. Chengdu Kanghua Biological | Liaoning Chengda vs. Beijing Wantai Biological | Liaoning Chengda vs. Suzhou Novoprotein Scientific | Liaoning Chengda vs. Aluminum Corp of |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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