Correlation Between Shandong Longquan and Jiangsu Xinning
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Jiangsu Xinning Modern, you can compare the effects of market volatilities on Shandong Longquan and Jiangsu Xinning 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 Shandong Longquan with a short position of Jiangsu Xinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Jiangsu Xinning.
Diversification Opportunities for Shandong Longquan and Jiangsu Xinning
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and Jiangsu is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and Jiangsu Xinning Modern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Xinning Modern and Shandong Longquan 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 Shandong Longquan Pipeline are associated (or correlated) with Jiangsu Xinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Xinning Modern has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and Jiangsu Xinning go up and down completely randomly.
Pair Corralation between Shandong Longquan and Jiangsu Xinning
Assuming the 90 days trading horizon Shandong Longquan is expected to generate 76.78 times less return on investment than Jiangsu Xinning. But when comparing it to its historical volatility, Shandong Longquan Pipeline is 1.57 times less risky than Jiangsu Xinning. It trades about 0.0 of its potential returns per unit of risk. Jiangsu Xinning Modern is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Jiangsu Xinning Modern on August 25, 2024 and sell it today you would earn a total of 66.00 from holding Jiangsu Xinning Modern or generate 21.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shandong Longquan Pipeline vs. Jiangsu Xinning Modern
Performance |
| Timeline |
| Shandong Longquan |
| Jiangsu Xinning Modern |
Shandong Longquan and Jiangsu Xinning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and Jiangsu Xinning
The main advantage of trading using opposite Shandong Longquan and Jiangsu Xinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, Jiangsu Xinning 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 Jiangsu Xinning will offset losses from the drop in Jiangsu Xinning's long position.The idea behind Shandong Longquan Pipeline and Jiangsu Xinning Modern pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Jiangsu Xinning vs. Sportsoul Co Ltd | Jiangsu Xinning vs. Chengdu Spaceon Electronics | Jiangsu Xinning vs. Shandong Longquan Pipeline | Jiangsu Xinning vs. Shanghai CEO Environmental |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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