Correlation Between Jilin Jlu and Ye Chiu
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By analyzing existing cross correlation between Jilin Jlu Communication and Ye Chiu Metal, you can compare the effects of market volatilities on Jilin Jlu and Ye Chiu 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 Ye Chiu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jilin Jlu and Ye Chiu.
Diversification Opportunities for Jilin Jlu and Ye Chiu
Very poor diversification
The 3 months correlation between Jilin and 601388 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jilin Jlu Communication and Ye Chiu Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ye Chiu Metal 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 Ye Chiu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ye Chiu Metal has no effect on the direction of Jilin Jlu i.e., Jilin Jlu and Ye Chiu go up and down completely randomly.
Pair Corralation between Jilin Jlu and Ye Chiu
Assuming the 90 days trading horizon Jilin Jlu Communication is expected to generate 1.36 times more return on investment than Ye Chiu. However, Jilin Jlu is 1.36 times more volatile than Ye Chiu Metal. It trades about 0.31 of its potential returns per unit of risk. Ye Chiu Metal is currently generating about -0.03 per unit of risk. If you would invest 817.00 in Jilin Jlu Communication on November 9, 2024 and sell it today you would earn a total of 86.00 from holding Jilin Jlu Communication or generate 10.53% 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. Ye Chiu Metal
Performance |
| Timeline |
| Jilin Jlu Communication |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Ye Chiu Metal |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Jilin Jlu and Ye Chiu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jilin Jlu and Ye Chiu
The main advantage of trading using opposite Jilin Jlu and Ye Chiu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jilin Jlu position performs unexpectedly, Ye Chiu 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 Ye Chiu will offset losses from the drop in Ye Chiu's long position.The idea behind Jilin Jlu Communication and Ye Chiu Metal 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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