Correlation Between Jiangxi Ganfeng and Xinjiang Zhongtai
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By analyzing existing cross correlation between Jiangxi Ganfeng Lithium and Xinjiang Zhongtai Chemical, you can compare the effects of market volatilities on Jiangxi Ganfeng and Xinjiang Zhongtai 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 Xinjiang Zhongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Ganfeng and Xinjiang Zhongtai.
Diversification Opportunities for Jiangxi Ganfeng and Xinjiang Zhongtai
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangxi and Xinjiang is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Ganfeng Lithium and Xinjiang Zhongtai Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Zhongtai 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 Xinjiang Zhongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Zhongtai has no effect on the direction of Jiangxi Ganfeng i.e., Jiangxi Ganfeng and Xinjiang Zhongtai go up and down completely randomly.
Pair Corralation between Jiangxi Ganfeng and Xinjiang Zhongtai
Assuming the 90 days trading horizon Jiangxi Ganfeng Lithium is expected to generate 1.38 times more return on investment than Xinjiang Zhongtai. However, Jiangxi Ganfeng is 1.38 times more volatile than Xinjiang Zhongtai Chemical. It trades about 0.02 of its potential returns per unit of risk. Xinjiang Zhongtai Chemical is currently generating about -0.04 per unit of risk. If you would invest 4,028 in Jiangxi Ganfeng Lithium on September 5, 2024 and sell it today you would earn a total of 113.00 from holding Jiangxi Ganfeng Lithium or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.58% |
| Values | Daily Returns |
Jiangxi Ganfeng Lithium vs. Xinjiang Zhongtai Chemical
Performance |
| Timeline |
| Jiangxi Ganfeng Lithium |
| Xinjiang Zhongtai |
Jiangxi Ganfeng and Xinjiang Zhongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Ganfeng and Xinjiang Zhongtai
The main advantage of trading using opposite Jiangxi Ganfeng and Xinjiang Zhongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Ganfeng position performs unexpectedly, Xinjiang Zhongtai 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 Xinjiang Zhongtai will offset losses from the drop in Xinjiang Zhongtai's long position.| Jiangxi Ganfeng vs. Suzhou Weizhixiang Food | Jiangxi Ganfeng vs. Olympic Circuit Technology | Jiangxi Ganfeng vs. Tianshui Huatian Technology | Jiangxi Ganfeng vs. Kangping Technology Co |
| Xinjiang Zhongtai vs. Zijin Mining Group | Xinjiang Zhongtai vs. Wanhua Chemical Group | Xinjiang Zhongtai vs. Baoshan Iron Steel | Xinjiang Zhongtai 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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