Correlation Between Jiangxi Hengda and Yingde Greatchem
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By analyzing existing cross correlation between Jiangxi Hengda Hi Tech and Yingde Greatchem Chemicals, you can compare the effects of market volatilities on Jiangxi Hengda and Yingde Greatchem 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 Hengda with a short position of Yingde Greatchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Hengda and Yingde Greatchem.
Diversification Opportunities for Jiangxi Hengda and Yingde Greatchem
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangxi and Yingde is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Hengda Hi Tech and Yingde Greatchem Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yingde Greatchem Che and Jiangxi Hengda 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 Hengda Hi Tech are associated (or correlated) with Yingde Greatchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yingde Greatchem Che has no effect on the direction of Jiangxi Hengda i.e., Jiangxi Hengda and Yingde Greatchem go up and down completely randomly.
Pair Corralation between Jiangxi Hengda and Yingde Greatchem
Assuming the 90 days trading horizon Jiangxi Hengda Hi Tech is expected to under-perform the Yingde Greatchem. In addition to that, Jiangxi Hengda is 1.85 times more volatile than Yingde Greatchem Chemicals. It trades about -0.09 of its total potential returns per unit of risk. Yingde Greatchem Chemicals is currently generating about -0.1 per unit of volatility. If you would invest 2,545 in Yingde Greatchem Chemicals on October 30, 2024 and sell it today you would lose (220.00) from holding Yingde Greatchem Chemicals or give up 8.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Hengda Hi Tech vs. Yingde Greatchem Chemicals
Performance |
| Timeline |
| Jiangxi Hengda Hi |
| Yingde Greatchem Che |
Jiangxi Hengda and Yingde Greatchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Hengda and Yingde Greatchem
The main advantage of trading using opposite Jiangxi Hengda and Yingde Greatchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Hengda position performs unexpectedly, Yingde Greatchem 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 Yingde Greatchem will offset losses from the drop in Yingde Greatchem's long position.| Jiangxi Hengda vs. Zijin Mining Group | Jiangxi Hengda vs. Wanhua Chemical Group | Jiangxi Hengda vs. Baoshan Iron Steel | Jiangxi Hengda vs. Shandong Gold Mining |
| Yingde Greatchem vs. Zijin Mining Group | Yingde Greatchem vs. Wanhua Chemical Group | Yingde Greatchem vs. Baoshan Iron Steel | Yingde Greatchem vs. Shandong Gold Mining |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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