Correlation Between Jilin Jlu and Shaanxi Meineng
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By analyzing existing cross correlation between Jilin Jlu Communication and Shaanxi Meineng Clean, you can compare the effects of market volatilities on Jilin Jlu and Shaanxi Meineng 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 Jilin Jlu with a short position of Shaanxi Meineng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jilin Jlu and Shaanxi Meineng.
Diversification Opportunities for Jilin Jlu and Shaanxi Meineng
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jilin and Shaanxi is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jilin Jlu Communication and Shaanxi Meineng Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Meineng Clean and Jilin Jlu 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 Jilin Jlu Communication are associated (or correlated) with Shaanxi Meineng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Meineng Clean has no effect on the direction of Jilin Jlu i.e., Jilin Jlu and Shaanxi Meineng go up and down completely randomly.
Pair Corralation between Jilin Jlu and Shaanxi Meineng
Assuming the 90 days trading horizon Jilin Jlu Communication is expected to generate 1.06 times more return on investment than Shaanxi Meineng. However, Jilin Jlu is 1.06 times more volatile than Shaanxi Meineng Clean. It trades about 0.02 of its potential returns per unit of risk. Shaanxi Meineng Clean is currently generating about -0.02 per unit of risk. If you would invest 857.00 in Jilin Jlu Communication on November 8, 2024 and sell it today you would earn a total of 31.00 from holding Jilin Jlu Communication or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jilin Jlu Communication vs. Shaanxi Meineng Clean
Performance |
| Timeline |
| Jilin Jlu Communication |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shaanxi Meineng Clean |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jilin Jlu and Shaanxi Meineng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jilin Jlu and Shaanxi Meineng
The main advantage of trading using opposite Jilin Jlu and Shaanxi Meineng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jilin Jlu position performs unexpectedly, Shaanxi Meineng 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 Shaanxi Meineng will offset losses from the drop in Shaanxi Meineng's long position.The idea behind Jilin Jlu Communication and Shaanxi Meineng Clean 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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