Correlation Between Yingde Greatchem and Jiangxi Hengda
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By analyzing existing cross correlation between Yingde Greatchem Chemicals and Jiangxi Hengda Hi Tech, you can compare the effects of market volatilities on Yingde Greatchem and Jiangxi Hengda 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 Yingde Greatchem with a short position of Jiangxi Hengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yingde Greatchem and Jiangxi Hengda.
Diversification Opportunities for Yingde Greatchem and Jiangxi Hengda
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yingde and Jiangxi is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Yingde Greatchem Chemicals and Jiangxi Hengda Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Hengda Hi and Yingde Greatchem 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 Yingde Greatchem Chemicals are associated (or correlated) with Jiangxi Hengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Hengda Hi has no effect on the direction of Yingde Greatchem i.e., Yingde Greatchem and Jiangxi Hengda go up and down completely randomly.
Pair Corralation between Yingde Greatchem and Jiangxi Hengda
Assuming the 90 days trading horizon Yingde Greatchem Chemicals is expected to generate 0.54 times more return on investment than Jiangxi Hengda. However, Yingde Greatchem Chemicals is 1.85 times less risky than Jiangxi Hengda. It trades about -0.1 of its potential returns per unit of risk. Jiangxi Hengda Hi Tech is currently generating about -0.09 per unit of risk. If you would invest 2,545 in Yingde Greatchem Chemicals on October 30, 2024 and sell it today you would lose (220.00) from holding Yingde Greatchem Chemicals or give up 8.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yingde Greatchem Chemicals vs. Jiangxi Hengda Hi Tech
Performance |
| Timeline |
| Yingde Greatchem Che |
| Jiangxi Hengda Hi |
Yingde Greatchem and Jiangxi Hengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yingde Greatchem and Jiangxi Hengda
The main advantage of trading using opposite Yingde Greatchem and Jiangxi Hengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yingde Greatchem position performs unexpectedly, Jiangxi Hengda 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 Hengda will offset losses from the drop in Jiangxi Hengda's long position.| Yingde Greatchem vs. Zijin Mining Group | Yingde Greatchem vs. Wanhua Chemical Group | Yingde Greatchem vs. Baoshan Iron Steel | Yingde Greatchem vs. Shandong Gold Mining |
| Jiangxi Hengda vs. Zijin Mining Group | Jiangxi Hengda vs. Wanhua Chemical Group | Jiangxi Hengda vs. Baoshan Iron Steel | Jiangxi Hengda vs. Shandong Gold Mining |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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