Correlation Between Guangzhou Zhujiang and Jiangsu Xinri
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Jiangsu Xinri E Vehicle, you can compare the effects of market volatilities on Guangzhou Zhujiang and Jiangsu Xinri 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 Xinri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Jiangsu Xinri.
Diversification Opportunities for Guangzhou Zhujiang and Jiangsu Xinri
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Jiangsu is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Jiangsu Xinri E Vehicle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Xinri E 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 Xinri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Xinri E has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Jiangsu Xinri go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Jiangsu Xinri
Assuming the 90 days trading horizon Guangzhou Zhujiang is expected to generate 2.0 times less return on investment than Jiangsu Xinri. But when comparing it to its historical volatility, Guangzhou Zhujiang Brewery is 1.43 times less risky than Jiangsu Xinri. It trades about 0.07 of its potential returns per unit of risk. Jiangsu Xinri E Vehicle is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,055 in Jiangsu Xinri E Vehicle on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Jiangsu Xinri E Vehicle or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Jiangsu Xinri E Vehicle
Performance |
| Timeline |
| Guangzhou Zhujiang |
| Jiangsu Xinri E |
Guangzhou Zhujiang and Jiangsu Xinri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Zhujiang and Jiangsu Xinri
The main advantage of trading using opposite Guangzhou Zhujiang and Jiangsu Xinri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Jiangsu Xinri 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 Xinri will offset losses from the drop in Jiangsu Xinri's long position.| Guangzhou Zhujiang vs. Shanghai Metersbonwe FashionAccessories | Guangzhou Zhujiang vs. Xiwang Foodstuffs Co | Guangzhou Zhujiang vs. JuneYao Dairy Co | Guangzhou Zhujiang vs. Xiamen Jihong Package |
| Jiangsu Xinri vs. Dawning Information Industry | Jiangsu Xinri vs. Ye Chiu Metal | Jiangsu Xinri vs. State Grid InformationCommunication | Jiangsu Xinri vs. Offshore Oil Engineering |
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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