Correlation Between Jiangsu Jinling and Guangdong Tianhe
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By analyzing existing cross correlation between Jiangsu Jinling Sports and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on Jiangsu Jinling and Guangdong Tianhe 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 Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Jinling and Guangdong Tianhe.
Diversification Opportunities for Jiangsu Jinling and Guangdong Tianhe
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Guangdong is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Jinling Sports and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr 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 Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of Jiangsu Jinling i.e., Jiangsu Jinling and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between Jiangsu Jinling and Guangdong Tianhe
Assuming the 90 days trading horizon Jiangsu Jinling Sports is expected to generate 1.11 times more return on investment than Guangdong Tianhe. However, Jiangsu Jinling is 1.11 times more volatile than Guangdong Tianhe Agricultural. It trades about 0.24 of its potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about 0.21 per unit of risk. If you would invest 1,180 in Jiangsu Jinling Sports on November 6, 2024 and sell it today you would earn a total of 105.00 from holding Jiangsu Jinling Sports or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Jinling Sports vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| Jiangsu Jinling Sports |
| Guangdong Tianhe Agr |
Jiangsu Jinling and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Jinling and Guangdong Tianhe
The main advantage of trading using opposite Jiangsu Jinling and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Jinling position performs unexpectedly, Guangdong Tianhe 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 Guangdong Tianhe will offset losses from the drop in Guangdong Tianhe's long position.| Jiangsu Jinling vs. Baoshan Iron Steel | Jiangsu Jinling vs. New Hope Dairy | Jiangsu Jinling vs. Youyou Foods Co | Jiangsu Jinling vs. Jinzai Food Group |
| Guangdong Tianhe vs. Ningbo Jintian Copper | Guangdong Tianhe vs. Uroica Mining Safety | Guangdong Tianhe vs. Mango Excellent Media | Guangdong Tianhe vs. Chengtun Mining Group |
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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