Correlation Between Guangdong Wens and Jiangxi JDL
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Jiangxi JDL Environmental, you can compare the effects of market volatilities on Guangdong Wens and Jiangxi JDL 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 Guangdong Wens with a short position of Jiangxi JDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Jiangxi JDL.
Diversification Opportunities for Guangdong Wens and Jiangxi JDL
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Jiangxi is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and Jiangxi JDL Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi JDL Environmental and Guangdong Wens 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 Guangdong Wens Foodstuff are associated (or correlated) with Jiangxi JDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi JDL Environmental has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and Jiangxi JDL go up and down completely randomly.
Pair Corralation between Guangdong Wens and Jiangxi JDL
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the Jiangxi JDL. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 1.08 times less risky than Jiangxi JDL. The stock trades about -0.02 of its potential returns per unit of risk. The Jiangxi JDL Environmental is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,311 in Jiangxi JDL Environmental on October 28, 2024 and sell it today you would lose (225.00) from holding Jiangxi JDL Environmental or give up 17.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Jiangxi JDL Environmental
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Jiangxi JDL Environmental |
Guangdong Wens and Jiangxi JDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Jiangxi JDL
The main advantage of trading using opposite Guangdong Wens and Jiangxi JDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, Jiangxi JDL 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 Jiangxi JDL will offset losses from the drop in Jiangxi JDL's long position.| Guangdong Wens vs. Luyin Investment Group | Guangdong Wens vs. Cultural Investment Holdings | Guangdong Wens vs. China Asset Management | Guangdong Wens vs. Jointo Energy Investment |
| Jiangxi JDL vs. Industrial and Commercial | Jiangxi JDL vs. Agricultural Bank of | Jiangxi JDL vs. China Construction Bank | Jiangxi JDL vs. Bank of China |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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