Correlation Between Sichuan Yahua and Jinlong Machinery
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By analyzing existing cross correlation between Sichuan Yahua Industrial and Jinlong Machinery Electronic, you can compare the effects of market volatilities on Sichuan Yahua and Jinlong Machinery 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 Yahua with a short position of Jinlong Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Yahua and Jinlong Machinery.
Diversification Opportunities for Sichuan Yahua and Jinlong Machinery
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sichuan and Jinlong is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Yahua Industrial and Jinlong Machinery Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinlong Machinery and Sichuan Yahua 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 Yahua Industrial are associated (or correlated) with Jinlong Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinlong Machinery has no effect on the direction of Sichuan Yahua i.e., Sichuan Yahua and Jinlong Machinery go up and down completely randomly.
Pair Corralation between Sichuan Yahua and Jinlong Machinery
Assuming the 90 days trading horizon Sichuan Yahua Industrial is expected to generate 0.88 times more return on investment than Jinlong Machinery. However, Sichuan Yahua Industrial is 1.14 times less risky than Jinlong Machinery. It trades about 0.1 of its potential returns per unit of risk. Jinlong Machinery Electronic is currently generating about -0.17 per unit of risk. If you would invest 1,189 in Sichuan Yahua Industrial on October 30, 2024 and sell it today you would earn a total of 127.00 from holding Sichuan Yahua Industrial or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Yahua Industrial vs. Jinlong Machinery Electronic
Performance |
| Timeline |
| Sichuan Yahua Industrial |
| Jinlong Machinery |
Sichuan Yahua and Jinlong Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Yahua and Jinlong Machinery
The main advantage of trading using opposite Sichuan Yahua and Jinlong Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Yahua position performs unexpectedly, Jinlong Machinery 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 Jinlong Machinery will offset losses from the drop in Jinlong Machinery's long position.| Sichuan Yahua vs. Uroica Mining Safety | Sichuan Yahua vs. Chengtun Mining Group | Sichuan Yahua vs. Guangdong Jingyi Metal | Sichuan Yahua vs. Western Metal Materials |
| Jinlong Machinery vs. Jiangsu Yanghe Brewery | Jinlong Machinery vs. Chison Medical Technologies | Jinlong Machinery vs. Tinavi Medical Technologies | Jinlong Machinery vs. Zhongzhu Medical Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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