Correlation Between Sichuan Jinshi and Kuang Chi
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By analyzing existing cross correlation between Sichuan Jinshi Technology and Kuang Chi Technologies, you can compare the effects of market volatilities on Sichuan Jinshi and Kuang Chi 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 Sichuan Jinshi with a short position of Kuang Chi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Jinshi and Kuang Chi.
Diversification Opportunities for Sichuan Jinshi and Kuang Chi
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sichuan and Kuang is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Jinshi Technology and Kuang Chi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuang Chi Technologies and Sichuan Jinshi 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 Sichuan Jinshi Technology are associated (or correlated) with Kuang Chi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuang Chi Technologies has no effect on the direction of Sichuan Jinshi i.e., Sichuan Jinshi and Kuang Chi go up and down completely randomly.
Pair Corralation between Sichuan Jinshi and Kuang Chi
Assuming the 90 days trading horizon Sichuan Jinshi is expected to generate 11.33 times less return on investment than Kuang Chi. But when comparing it to its historical volatility, Sichuan Jinshi Technology is 1.28 times less risky than Kuang Chi. It trades about 0.01 of its potential returns per unit of risk. Kuang Chi Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,822 in Kuang Chi Technologies on November 7, 2024 and sell it today you would earn a total of 2,243 from holding Kuang Chi Technologies or generate 123.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Jinshi Technology vs. Kuang Chi Technologies
Performance |
| Timeline |
| Sichuan Jinshi Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kuang Chi Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sichuan Jinshi and Kuang Chi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Jinshi and Kuang Chi
The main advantage of trading using opposite Sichuan Jinshi and Kuang Chi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Jinshi position performs unexpectedly, Kuang Chi 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 Kuang Chi will offset losses from the drop in Kuang Chi's long position.The idea behind Sichuan Jinshi Technology and Kuang Chi Technologies 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.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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