Correlation Between Jiangsu Jinling and Longxing Chemical
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By analyzing existing cross correlation between Jiangsu Jinling Sports and Longxing Chemical Stock, you can compare the effects of market volatilities on Jiangsu Jinling and Longxing Chemical 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 Jiangsu Jinling with a short position of Longxing Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Jinling and Longxing Chemical.
Diversification Opportunities for Jiangsu Jinling and Longxing Chemical
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangsu and Longxing is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Jinling Sports and Longxing Chemical Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longxing Chemical Stock and Jiangsu Jinling 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 Jiangsu Jinling Sports are associated (or correlated) with Longxing Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longxing Chemical Stock has no effect on the direction of Jiangsu Jinling i.e., Jiangsu Jinling and Longxing Chemical go up and down completely randomly.
Pair Corralation between Jiangsu Jinling and Longxing Chemical
Assuming the 90 days trading horizon Jiangsu Jinling is expected to generate 1.02 times less return on investment than Longxing Chemical. But when comparing it to its historical volatility, Jiangsu Jinling Sports is 1.03 times less risky than Longxing Chemical. It trades about 0.26 of its potential returns per unit of risk. Longxing Chemical Stock is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 494.00 in Longxing Chemical Stock on September 1, 2024 and sell it today you would earn a total of 71.00 from holding Longxing Chemical Stock or generate 14.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Jinling Sports vs. Longxing Chemical Stock
Performance |
| Timeline |
| Jiangsu Jinling Sports |
| Longxing Chemical Stock |
Jiangsu Jinling and Longxing Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Jinling and Longxing Chemical
The main advantage of trading using opposite Jiangsu Jinling and Longxing Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Jinling position performs unexpectedly, Longxing Chemical 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 Longxing Chemical will offset losses from the drop in Longxing Chemical's long position.| Jiangsu Jinling vs. Nanjing Putian Telecommunications | Jiangsu Jinling vs. Shenzhen Hifuture Electric | Jiangsu Jinling vs. Tianjin Realty Development | Jiangsu Jinling vs. Shenyang Huitian Thermal |
| Longxing Chemical vs. Dongfeng Automobile Co | Longxing Chemical vs. Sunwave Communications Co | Longxing Chemical vs. Shanghai Metersbonwe FashionAccessories | Longxing Chemical vs. Zotye Automobile Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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