Correlation Between Aba Chemicals and Gansu Jiu
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By analyzing existing cross correlation between Aba Chemicals Corp and Gansu Jiu Steel, you can compare the effects of market volatilities on Aba Chemicals and Gansu Jiu 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 Aba Chemicals with a short position of Gansu Jiu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Gansu Jiu.
Diversification Opportunities for Aba Chemicals and Gansu Jiu
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aba and Gansu is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Gansu Jiu Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Jiu Steel and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Gansu Jiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Jiu Steel has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Gansu Jiu go up and down completely randomly.
Pair Corralation between Aba Chemicals and Gansu Jiu
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Gansu Jiu. But the stock apears to be less risky and, when comparing its historical volatility, Aba Chemicals Corp is 1.02 times less risky than Gansu Jiu. The stock trades about -0.24 of its potential returns per unit of risk. The Gansu Jiu Steel is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 163.00 in Gansu Jiu Steel on October 25, 2024 and sell it today you would lose (17.00) from holding Gansu Jiu Steel or give up 10.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Gansu Jiu Steel
Performance |
| Timeline |
| Aba Chemicals Corp |
| Gansu Jiu Steel |
Aba Chemicals and Gansu Jiu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Gansu Jiu
The main advantage of trading using opposite Aba Chemicals and Gansu Jiu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Gansu Jiu 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 Gansu Jiu will offset losses from the drop in Gansu Jiu's long position.| Aba Chemicals vs. Zijin Mining Group | Aba Chemicals vs. Wanhua Chemical Group | Aba Chemicals vs. Baoshan Iron Steel | Aba Chemicals vs. Rongsheng Petrochemical Co |
| Gansu Jiu vs. Dynagreen Environmental Protection | Gansu Jiu vs. Universal Scientific Industrial | Gansu Jiu vs. Anyang Iron Steel | Gansu Jiu vs. Tongxing Environmental Protection |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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