Correlation Between Sichuan Jinshi and Gan Yuan
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By analyzing existing cross correlation between Sichuan Jinshi Technology and Gan Yuan Foods, you can compare the effects of market volatilities on Sichuan Jinshi and Gan Yuan 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 Gan Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Jinshi and Gan Yuan.
Diversification Opportunities for Sichuan Jinshi and Gan Yuan
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Gan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Jinshi Technology and Gan Yuan Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan Yuan Foods 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 Gan Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan Yuan Foods has no effect on the direction of Sichuan Jinshi i.e., Sichuan Jinshi and Gan Yuan go up and down completely randomly.
Pair Corralation between Sichuan Jinshi and Gan Yuan
Assuming the 90 days trading horizon Sichuan Jinshi Technology is expected to under-perform the Gan Yuan. In addition to that, Sichuan Jinshi is 1.08 times more volatile than Gan Yuan Foods. It trades about -0.01 of its total potential returns per unit of risk. Gan Yuan Foods is currently generating about 0.03 per unit of volatility. If you would invest 6,940 in Gan Yuan Foods on September 26, 2024 and sell it today you would earn a total of 1,938 from holding Gan Yuan Foods or generate 27.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Jinshi Technology vs. Gan Yuan Foods
Performance |
| Timeline |
| Sichuan Jinshi Technology |
| Gan Yuan Foods |
Sichuan Jinshi and Gan Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Jinshi and Gan Yuan
The main advantage of trading using opposite Sichuan Jinshi and Gan Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Jinshi position performs unexpectedly, Gan Yuan 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 Gan Yuan will offset losses from the drop in Gan Yuan's long position.| Sichuan Jinshi vs. Zijin Mining Group | Sichuan Jinshi vs. Wanhua Chemical Group | Sichuan Jinshi vs. Baoshan Iron Steel | Sichuan Jinshi vs. Shandong Gold Mining |
| Gan Yuan vs. Ming Yang Smart | Gan Yuan vs. 159681 | Gan Yuan vs. 159005 | Gan Yuan vs. Loctek Ergonomic Technology |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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