Correlation Between Beijing HuaYuanYiTong and Jiangsu Zhongtian
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By analyzing existing cross correlation between Beijing HuaYuanYiTong Thermal and Jiangsu Zhongtian Technology, you can compare the effects of market volatilities on Beijing HuaYuanYiTong and Jiangsu Zhongtian 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 Beijing HuaYuanYiTong with a short position of Jiangsu Zhongtian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing HuaYuanYiTong and Jiangsu Zhongtian.
Diversification Opportunities for Beijing HuaYuanYiTong and Jiangsu Zhongtian
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Jiangsu is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Beijing HuaYuanYiTong Thermal and Jiangsu Zhongtian Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Zhongtian and Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong Thermal are associated (or correlated) with Jiangsu Zhongtian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Zhongtian has no effect on the direction of Beijing HuaYuanYiTong i.e., Beijing HuaYuanYiTong and Jiangsu Zhongtian go up and down completely randomly.
Pair Corralation between Beijing HuaYuanYiTong and Jiangsu Zhongtian
Assuming the 90 days trading horizon Beijing HuaYuanYiTong Thermal is expected to under-perform the Jiangsu Zhongtian. In addition to that, Beijing HuaYuanYiTong is 1.37 times more volatile than Jiangsu Zhongtian Technology. It trades about -0.3 of its total potential returns per unit of risk. Jiangsu Zhongtian Technology is currently generating about -0.09 per unit of volatility. If you would invest 1,565 in Jiangsu Zhongtian Technology on September 26, 2024 and sell it today you would lose (54.00) from holding Jiangsu Zhongtian Technology or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing HuaYuanYiTong Thermal vs. Jiangsu Zhongtian Technology
Performance |
| Timeline |
| Beijing HuaYuanYiTong |
| Jiangsu Zhongtian |
Beijing HuaYuanYiTong and Jiangsu Zhongtian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing HuaYuanYiTong and Jiangsu Zhongtian
The main advantage of trading using opposite Beijing HuaYuanYiTong and Jiangsu Zhongtian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing HuaYuanYiTong position performs unexpectedly, Jiangsu Zhongtian 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 Zhongtian will offset losses from the drop in Jiangsu Zhongtian's long position.| Beijing HuaYuanYiTong vs. Ningbo Homelink Eco iTech | Beijing HuaYuanYiTong vs. UE Furniture Co | Beijing HuaYuanYiTong vs. Anhui Gujing Distillery | Beijing HuaYuanYiTong vs. Lootom Telcovideo Network |
| Jiangsu Zhongtian vs. Kweichow Moutai Co | Jiangsu Zhongtian vs. Contemporary Amperex Technology | Jiangsu Zhongtian vs. G bits Network Technology | Jiangsu Zhongtian vs. BYD Co Ltd |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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