Correlation Between Jiangxi Ganfeng and Shenyang Chemical
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By analyzing existing cross correlation between Jiangxi Ganfeng Lithium and Shenyang Chemical Industry, you can compare the effects of market volatilities on Jiangxi Ganfeng and Shenyang Chemical 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 Jiangxi Ganfeng with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Ganfeng and Shenyang Chemical.
Diversification Opportunities for Jiangxi Ganfeng and Shenyang Chemical
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangxi and Shenyang is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Ganfeng Lithium and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and Jiangxi Ganfeng 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 Jiangxi Ganfeng Lithium are associated (or correlated) with Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of Jiangxi Ganfeng i.e., Jiangxi Ganfeng and Shenyang Chemical go up and down completely randomly.
Pair Corralation between Jiangxi Ganfeng and Shenyang Chemical
Assuming the 90 days trading horizon Jiangxi Ganfeng Lithium is expected to generate 0.92 times more return on investment than Shenyang Chemical. However, Jiangxi Ganfeng Lithium is 1.08 times less risky than Shenyang Chemical. It trades about -0.05 of its potential returns per unit of risk. Shenyang Chemical Industry is currently generating about -0.15 per unit of risk. If you would invest 3,650 in Jiangxi Ganfeng Lithium on October 22, 2024 and sell it today you would lose (96.00) from holding Jiangxi Ganfeng Lithium or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Ganfeng Lithium vs. Shenyang Chemical Industry
Performance |
| Timeline |
| Jiangxi Ganfeng Lithium |
| Shenyang Chemical |
Jiangxi Ganfeng and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Ganfeng and Shenyang Chemical
The main advantage of trading using opposite Jiangxi Ganfeng and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Ganfeng position performs unexpectedly, Shenyang Chemical 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.| Jiangxi Ganfeng vs. Chengtun Mining Group | Jiangxi Ganfeng vs. Guocheng Mining Co | Jiangxi Ganfeng vs. Qumei Furniture Group | Jiangxi Ganfeng vs. Guangzhou Haozhi Industrial |
| Shenyang Chemical vs. Fibocom Wireless | Shenyang Chemical vs. Changchun Engley Automobile | Shenyang Chemical vs. Harvest Fund Management | Shenyang Chemical vs. Tongyu Communication |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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