Correlation Between Jiangxi Ganfeng and Xinxiang Chemical
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By analyzing existing cross correlation between Jiangxi Ganfeng Lithium and Xinxiang Chemical Fiber, you can compare the effects of market volatilities on Jiangxi Ganfeng and Xinxiang 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 Xinxiang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Ganfeng and Xinxiang Chemical.
Diversification Opportunities for Jiangxi Ganfeng and Xinxiang Chemical
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangxi and Xinxiang is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Ganfeng Lithium and Xinxiang Chemical Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinxiang Chemical Fiber 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 Xinxiang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinxiang Chemical Fiber has no effect on the direction of Jiangxi Ganfeng i.e., Jiangxi Ganfeng and Xinxiang Chemical go up and down completely randomly.
Pair Corralation between Jiangxi Ganfeng and Xinxiang Chemical
Assuming the 90 days trading horizon Jiangxi Ganfeng Lithium is expected to under-perform the Xinxiang Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Jiangxi Ganfeng Lithium is 1.37 times less risky than Xinxiang Chemical. The stock trades about -0.09 of its potential returns per unit of risk. The Xinxiang Chemical Fiber is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 378.00 in Xinxiang Chemical Fiber on September 15, 2024 and sell it today you would earn a total of 76.00 from holding Xinxiang Chemical Fiber or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Ganfeng Lithium vs. Xinxiang Chemical Fiber
Performance |
| Timeline |
| Jiangxi Ganfeng Lithium |
| Xinxiang Chemical Fiber |
Jiangxi Ganfeng and Xinxiang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Ganfeng and Xinxiang Chemical
The main advantage of trading using opposite Jiangxi Ganfeng and Xinxiang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Ganfeng position performs unexpectedly, Xinxiang 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 Xinxiang Chemical will offset losses from the drop in Xinxiang Chemical's long position.| Jiangxi Ganfeng vs. Zijin Mining Group | Jiangxi Ganfeng vs. Wanhua Chemical Group | Jiangxi Ganfeng vs. Baoshan Iron Steel | Jiangxi Ganfeng vs. Shandong Gold Mining |
| Xinxiang Chemical vs. Zijin Mining Group | Xinxiang Chemical vs. Wanhua Chemical Group | Xinxiang Chemical vs. Baoshan Iron Steel | Xinxiang Chemical vs. Shandong Gold Mining |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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