Correlation Between Guangzhou Zhujiang and Jiangsu Financial
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Jiangsu Financial Leasing, you can compare the effects of market volatilities on Guangzhou Zhujiang and Jiangsu Financial 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 Guangzhou Zhujiang with a short position of Jiangsu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Jiangsu Financial.
Diversification Opportunities for Guangzhou Zhujiang and Jiangsu Financial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Jiangsu is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Jiangsu Financial Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Financial Leasing and Guangzhou Zhujiang 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 Guangzhou Zhujiang Brewery are associated (or correlated) with Jiangsu Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Financial Leasing has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Jiangsu Financial go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Jiangsu Financial
Assuming the 90 days trading horizon Guangzhou Zhujiang Brewery is expected to generate 0.94 times more return on investment than Jiangsu Financial. However, Guangzhou Zhujiang Brewery is 1.06 times less risky than Jiangsu Financial. It trades about -0.01 of its potential returns per unit of risk. Jiangsu Financial Leasing is currently generating about -0.08 per unit of risk. If you would invest 910.00 in Guangzhou Zhujiang Brewery on September 12, 2024 and sell it today you would lose (4.00) from holding Guangzhou Zhujiang Brewery or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Jiangsu Financial Leasing
Performance |
| Timeline |
| Guangzhou Zhujiang |
| Jiangsu Financial Leasing |
Guangzhou Zhujiang and Jiangsu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Zhujiang and Jiangsu Financial
The main advantage of trading using opposite Guangzhou Zhujiang and Jiangsu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Jiangsu Financial 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 Jiangsu Financial will offset losses from the drop in Jiangsu Financial's long position.| Guangzhou Zhujiang vs. China Petroleum Chemical | Guangzhou Zhujiang vs. PetroChina Co Ltd | Guangzhou Zhujiang vs. China State Construction | Guangzhou Zhujiang vs. China Railway Group |
| Jiangsu Financial vs. China Petroleum Chemical | Jiangsu Financial vs. PetroChina Co Ltd | Jiangsu Financial vs. China Mobile Limited | Jiangsu Financial vs. Industrial and Commercial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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