Correlation Between Jiangxi Ganfeng and Hangzhou Gaoxin
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By analyzing existing cross correlation between Jiangxi Ganfeng Lithium and Hangzhou Gaoxin Rubber, you can compare the effects of market volatilities on Jiangxi Ganfeng and Hangzhou Gaoxin 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 Hangzhou Gaoxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Ganfeng and Hangzhou Gaoxin.
Diversification Opportunities for Jiangxi Ganfeng and Hangzhou Gaoxin
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jiangxi and Hangzhou is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Ganfeng Lithium and Hangzhou Gaoxin Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Gaoxin Rubber 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 Hangzhou Gaoxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Gaoxin Rubber has no effect on the direction of Jiangxi Ganfeng i.e., Jiangxi Ganfeng and Hangzhou Gaoxin go up and down completely randomly.
Pair Corralation between Jiangxi Ganfeng and Hangzhou Gaoxin
Assuming the 90 days trading horizon Jiangxi Ganfeng Lithium is expected to under-perform the Hangzhou Gaoxin. But the stock apears to be less risky and, when comparing its historical volatility, Jiangxi Ganfeng Lithium is 1.4 times less risky than Hangzhou Gaoxin. The stock trades about -0.03 of its potential returns per unit of risk. The Hangzhou Gaoxin Rubber is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 939.00 in Hangzhou Gaoxin Rubber on November 27, 2024 and sell it today you would earn a total of 555.00 from holding Hangzhou Gaoxin Rubber or generate 59.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Ganfeng Lithium vs. Hangzhou Gaoxin Rubber
Performance |
| Timeline |
| Jiangxi Ganfeng Lithium |
| Hangzhou Gaoxin Rubber |
Jiangxi Ganfeng and Hangzhou Gaoxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Ganfeng and Hangzhou Gaoxin
The main advantage of trading using opposite Jiangxi Ganfeng and Hangzhou Gaoxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Ganfeng position performs unexpectedly, Hangzhou Gaoxin 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 Hangzhou Gaoxin will offset losses from the drop in Hangzhou Gaoxin's long position.| Jiangxi Ganfeng vs. Guotai Epoint Software | Jiangxi Ganfeng vs. Andon Health Co | Jiangxi Ganfeng vs. Shandong Sinoglory Health | Jiangxi Ganfeng vs. GuoChuang Software Co |
| Hangzhou Gaoxin vs. Dongfeng Automobile Co | Hangzhou Gaoxin vs. iSoftStone Information Technology | Hangzhou Gaoxin vs. CICT Mobile Communication | Hangzhou Gaoxin vs. Jilin Jlu 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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