Correlation Between Jiangsu Yanghe and Longjian Road
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By analyzing existing cross correlation between Jiangsu Yanghe Brewery and Longjian Road Bridge, you can compare the effects of market volatilities on Jiangsu Yanghe and Longjian Road 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 Longjian Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Yanghe and Longjian Road.
Diversification Opportunities for Jiangsu Yanghe and Longjian Road
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jiangsu and Longjian is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Yanghe Brewery and Longjian Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longjian Road Bridge 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 Longjian Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longjian Road Bridge has no effect on the direction of Jiangsu Yanghe i.e., Jiangsu Yanghe and Longjian Road go up and down completely randomly.
Pair Corralation between Jiangsu Yanghe and Longjian Road
Assuming the 90 days trading horizon Jiangsu Yanghe Brewery is expected to under-perform the Longjian Road. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Yanghe Brewery is 1.7 times less risky than Longjian Road. The stock trades about -0.08 of its potential returns per unit of risk. The Longjian Road Bridge is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 415.00 in Longjian Road Bridge on October 14, 2024 and sell it today you would lose (61.00) from holding Longjian Road Bridge or give up 14.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Yanghe Brewery vs. Longjian Road Bridge
Performance |
| Timeline |
| Jiangsu Yanghe Brewery |
| Longjian Road Bridge |
Jiangsu Yanghe and Longjian Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Yanghe and Longjian Road
The main advantage of trading using opposite Jiangsu Yanghe and Longjian Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Yanghe position performs unexpectedly, Longjian Road 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 Longjian Road will offset losses from the drop in Longjian Road's long position.| Jiangsu Yanghe vs. Jiangsu Xinri E Vehicle | Jiangsu Yanghe vs. Shenyang Chemical Industry | Jiangsu Yanghe vs. Zhejiang Qianjiang Motorcycle | Jiangsu Yanghe vs. Changchun Engley Automobile |
| Longjian Road vs. Tinavi Medical Technologies | Longjian Road vs. Guangzhou Zhujiang Brewery | Longjian Road vs. Jiangsu Yanghe Brewery | Longjian Road vs. Sunwave Communications Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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