Correlation Between Sichuan Tianqi and Changsha Jingjia
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By analyzing existing cross correlation between Sichuan Tianqi Lithium and Changsha Jingjia Microelectronics, you can compare the effects of market volatilities on Sichuan Tianqi and Changsha Jingjia 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 Sichuan Tianqi with a short position of Changsha Jingjia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Tianqi and Changsha Jingjia.
Diversification Opportunities for Sichuan Tianqi and Changsha Jingjia
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Changsha is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Tianqi Lithium and Changsha Jingjia Microelectron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changsha Jingjia Mic and Sichuan Tianqi 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 Sichuan Tianqi Lithium are associated (or correlated) with Changsha Jingjia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changsha Jingjia Mic has no effect on the direction of Sichuan Tianqi i.e., Sichuan Tianqi and Changsha Jingjia go up and down completely randomly.
Pair Corralation between Sichuan Tianqi and Changsha Jingjia
Assuming the 90 days trading horizon Sichuan Tianqi Lithium is expected to under-perform the Changsha Jingjia. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Tianqi Lithium is 2.94 times less risky than Changsha Jingjia. The stock trades about -0.33 of its potential returns per unit of risk. The Changsha Jingjia Microelectronics is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 8,122 in Changsha Jingjia Microelectronics on September 27, 2024 and sell it today you would earn a total of 2,278 from holding Changsha Jingjia Microelectronics or generate 28.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Tianqi Lithium vs. Changsha Jingjia Microelectron
Performance |
| Timeline |
| Sichuan Tianqi Lithium |
| Changsha Jingjia Mic |
Sichuan Tianqi and Changsha Jingjia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Tianqi and Changsha Jingjia
The main advantage of trading using opposite Sichuan Tianqi and Changsha Jingjia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Tianqi position performs unexpectedly, Changsha Jingjia 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 Changsha Jingjia will offset losses from the drop in Changsha Jingjia's long position.| Sichuan Tianqi vs. Zijin Mining Group | Sichuan Tianqi vs. Baoshan Iron Steel | Sichuan Tianqi vs. Shandong Gold Mining | Sichuan Tianqi vs. Rongsheng Petrochemical Co |
| Changsha Jingjia vs. Ming Yang Smart | Changsha Jingjia vs. 159681 | Changsha Jingjia vs. 159005 | Changsha Jingjia vs. Loctek Ergonomic Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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