Correlation Between Jiangsu Yanghe and Guangzhou Zhujiang
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By analyzing existing cross correlation between Jiangsu Yanghe Brewery and Guangzhou Zhujiang Brewery, you can compare the effects of market volatilities on Jiangsu Yanghe and Guangzhou Zhujiang 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 Jiangsu Yanghe with a short position of Guangzhou Zhujiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Yanghe and Guangzhou Zhujiang.
Diversification Opportunities for Jiangsu Yanghe and Guangzhou Zhujiang
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Guangzhou is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Yanghe Brewery and Guangzhou Zhujiang Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Zhujiang and Jiangsu Yanghe 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 Jiangsu Yanghe Brewery are associated (or correlated) with Guangzhou Zhujiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Zhujiang has no effect on the direction of Jiangsu Yanghe i.e., Jiangsu Yanghe and Guangzhou Zhujiang go up and down completely randomly.
Pair Corralation between Jiangsu Yanghe and Guangzhou Zhujiang
Assuming the 90 days trading horizon Jiangsu Yanghe Brewery is expected to generate 1.29 times more return on investment than Guangzhou Zhujiang. However, Jiangsu Yanghe is 1.29 times more volatile than Guangzhou Zhujiang Brewery. It trades about 0.08 of its potential returns per unit of risk. Guangzhou Zhujiang Brewery is currently generating about 0.05 per unit of risk. If you would invest 7,725 in Jiangsu Yanghe Brewery on September 4, 2024 and sell it today you would earn a total of 969.00 from holding Jiangsu Yanghe Brewery or generate 12.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Yanghe Brewery vs. Guangzhou Zhujiang Brewery
Performance |
| Timeline |
| Jiangsu Yanghe Brewery |
| Guangzhou Zhujiang |
Jiangsu Yanghe and Guangzhou Zhujiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Yanghe and Guangzhou Zhujiang
The main advantage of trading using opposite Jiangsu Yanghe and Guangzhou Zhujiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Yanghe position performs unexpectedly, Guangzhou Zhujiang 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 Guangzhou Zhujiang will offset losses from the drop in Guangzhou Zhujiang's long position.| Jiangsu Yanghe vs. Luyin Investment Group | Jiangsu Yanghe vs. Eastern Air Logistics | Jiangsu Yanghe vs. Zhongshan Broad Ocean Motor | Jiangsu Yanghe vs. Hunan TV Broadcast |
| Guangzhou Zhujiang vs. Hefei Metalforming Mach | Guangzhou Zhujiang vs. Jiangsu Yanghe Brewery | Guangzhou Zhujiang vs. Ye Chiu Metal | Guangzhou Zhujiang vs. Liuzhou Chemical Industry |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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