Correlation Between Jiangxi Hengda and Tianjin Hi
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By analyzing existing cross correlation between Jiangxi Hengda Hi Tech and Tianjin Hi Tech Development, you can compare the effects of market volatilities on Jiangxi Hengda and Tianjin Hi 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 Tianjin Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Hengda and Tianjin Hi.
Diversification Opportunities for Jiangxi Hengda and Tianjin Hi
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangxi and Tianjin is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Hengda Hi Tech and Tianjin Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Hi Tech 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 Tianjin Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Hi Tech has no effect on the direction of Jiangxi Hengda i.e., Jiangxi Hengda and Tianjin Hi go up and down completely randomly.
Pair Corralation between Jiangxi Hengda and Tianjin Hi
Assuming the 90 days trading horizon Jiangxi Hengda Hi Tech is expected to generate 1.05 times more return on investment than Tianjin Hi. However, Jiangxi Hengda is 1.05 times more volatile than Tianjin Hi Tech Development. It trades about 0.12 of its potential returns per unit of risk. Tianjin Hi Tech Development is currently generating about 0.1 per unit of risk. If you would invest 538.00 in Jiangxi Hengda Hi Tech on September 1, 2024 and sell it today you would earn a total of 41.00 from holding Jiangxi Hengda Hi Tech or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Hengda Hi Tech vs. Tianjin Hi Tech Development
Performance |
| Timeline |
| Jiangxi Hengda Hi |
| Tianjin Hi Tech |
Jiangxi Hengda and Tianjin Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Hengda and Tianjin Hi
The main advantage of trading using opposite Jiangxi Hengda and Tianjin Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Hengda position performs unexpectedly, Tianjin Hi 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 Tianjin Hi will offset losses from the drop in Tianjin Hi's long position.| Jiangxi Hengda vs. Zijin Mining Group | Jiangxi Hengda vs. Baoshan Iron Steel | Jiangxi Hengda vs. Shandong Gold Mining | Jiangxi Hengda vs. Rongsheng Petrochemical Co |
| Tianjin Hi vs. Cultural Investment Holdings | Tianjin Hi vs. Gome Telecom Equipment | Tianjin Hi vs. Bus Online Co | Tianjin Hi vs. Zotye Automobile Co |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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