Correlation Between Sichuan Jinshi and China Building
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By analyzing existing cross correlation between Sichuan Jinshi Technology and China Building Material, you can compare the effects of market volatilities on Sichuan Jinshi and China Building 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 China Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Jinshi and China Building.
Diversification Opportunities for Sichuan Jinshi and China Building
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sichuan and China is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Jinshi Technology and China Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Building Material 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 China Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Building Material has no effect on the direction of Sichuan Jinshi i.e., Sichuan Jinshi and China Building go up and down completely randomly.
Pair Corralation between Sichuan Jinshi and China Building
Assuming the 90 days trading horizon Sichuan Jinshi Technology is expected to under-perform the China Building. In addition to that, Sichuan Jinshi is 1.1 times more volatile than China Building Material. It trades about -0.04 of its total potential returns per unit of risk. China Building Material is currently generating about -0.03 per unit of volatility. If you would invest 1,179 in China Building Material on November 7, 2024 and sell it today you would lose (463.00) from holding China Building Material or give up 39.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Jinshi Technology vs. China Building Material
Performance |
| Timeline |
| Sichuan Jinshi Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Building Material |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sichuan Jinshi and China Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Jinshi and China Building
The main advantage of trading using opposite Sichuan Jinshi and China Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Jinshi position performs unexpectedly, China Building 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 China Building will offset losses from the drop in China Building's long position.The idea behind Sichuan Jinshi Technology and China Building Material 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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