Correlation Between Jinlong Machinery and China State
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By analyzing existing cross correlation between Jinlong Machinery Electronic and China State Construction, you can compare the effects of market volatilities on Jinlong Machinery and China State 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 Jinlong Machinery with a short position of China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinlong Machinery and China State.
Diversification Opportunities for Jinlong Machinery and China State
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jinlong and China is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jinlong Machinery Electronic and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction and Jinlong Machinery 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 Jinlong Machinery Electronic are associated (or correlated) with China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Jinlong Machinery i.e., Jinlong Machinery and China State go up and down completely randomly.
Pair Corralation between Jinlong Machinery and China State
Assuming the 90 days trading horizon Jinlong Machinery Electronic is expected to under-perform the China State. In addition to that, Jinlong Machinery is 3.13 times more volatile than China State Construction. It trades about -0.11 of its total potential returns per unit of risk. China State Construction is currently generating about -0.12 per unit of volatility. If you would invest 589.00 in China State Construction on October 26, 2024 and sell it today you would lose (33.00) from holding China State Construction or give up 5.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinlong Machinery Electronic vs. China State Construction
Performance |
| Timeline |
| Jinlong Machinery |
| China State Construction |
Jinlong Machinery and China State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinlong Machinery and China State
The main advantage of trading using opposite Jinlong Machinery and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinlong Machinery position performs unexpectedly, China State 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 State will offset losses from the drop in China State's long position.| Jinlong Machinery vs. China State Construction | Jinlong Machinery vs. Poly Real Estate | Jinlong Machinery vs. China Vanke Co | Jinlong Machinery vs. China Merchants Shekou |
| China State vs. Easyhome New Retail | China State vs. Jiangsu Broadcasting Cable | China State vs. Chahua Modern Housewares | China State vs. Gansu Huangtai Wine marketing |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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