Correlation Between Jiangxi Hengda and Renxin New
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By analyzing existing cross correlation between Jiangxi Hengda Hi Tech and Renxin New Material, you can compare the effects of market volatilities on Jiangxi Hengda and Renxin New 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 Renxin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Hengda and Renxin New.
Diversification Opportunities for Jiangxi Hengda and Renxin New
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangxi and Renxin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Hengda Hi Tech and Renxin New Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renxin New Material 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 Renxin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renxin New Material has no effect on the direction of Jiangxi Hengda i.e., Jiangxi Hengda and Renxin New go up and down completely randomly.
Pair Corralation between Jiangxi Hengda and Renxin New
Assuming the 90 days trading horizon Jiangxi Hengda Hi Tech is expected to generate 1.63 times more return on investment than Renxin New. However, Jiangxi Hengda is 1.63 times more volatile than Renxin New Material. It trades about 0.33 of its potential returns per unit of risk. Renxin New Material is currently generating about 0.15 per unit of risk. If you would invest 503.00 in Jiangxi Hengda Hi Tech on November 29, 2024 and sell it today you would earn a total of 48.00 from holding Jiangxi Hengda Hi Tech or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Hengda Hi Tech vs. Renxin New Material
Performance |
| Timeline |
| Jiangxi Hengda Hi |
| Renxin New Material |
Jiangxi Hengda and Renxin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Hengda and Renxin New
The main advantage of trading using opposite Jiangxi Hengda and Renxin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Hengda position performs unexpectedly, Renxin New 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 Renxin New will offset losses from the drop in Renxin New's long position.| Jiangxi Hengda vs. Henan Shuanghui Investment | Jiangxi Hengda vs. Tieling Newcity Investment | Jiangxi Hengda vs. Vanfund Urban Investment | Jiangxi Hengda vs. Air China Ltd |
| Renxin New vs. Zijin Mining Group | Renxin New vs. Wanhua Chemical Group | Renxin New vs. Baoshan Iron Steel | Renxin New 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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