Correlation Between Jiangxi Naipu and Xinjiang Tianrun
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By analyzing existing cross correlation between Jiangxi Naipu Mining and Xinjiang Tianrun Dairy, you can compare the effects of market volatilities on Jiangxi Naipu and Xinjiang Tianrun 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 Jiangxi Naipu with a short position of Xinjiang Tianrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Naipu and Xinjiang Tianrun.
Diversification Opportunities for Jiangxi Naipu and Xinjiang Tianrun
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangxi and Xinjiang is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Naipu Mining and Xinjiang Tianrun Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Tianrun Dairy and Jiangxi Naipu 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 Jiangxi Naipu Mining are associated (or correlated) with Xinjiang Tianrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Tianrun Dairy has no effect on the direction of Jiangxi Naipu i.e., Jiangxi Naipu and Xinjiang Tianrun go up and down completely randomly.
Pair Corralation between Jiangxi Naipu and Xinjiang Tianrun
Assuming the 90 days trading horizon Jiangxi Naipu Mining is expected to generate 1.36 times more return on investment than Xinjiang Tianrun. However, Jiangxi Naipu is 1.36 times more volatile than Xinjiang Tianrun Dairy. It trades about 0.06 of its potential returns per unit of risk. Xinjiang Tianrun Dairy is currently generating about -0.04 per unit of risk. If you would invest 1,941 in Jiangxi Naipu Mining on September 12, 2024 and sell it today you would earn a total of 1,024 from holding Jiangxi Naipu Mining or generate 52.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Naipu Mining vs. Xinjiang Tianrun Dairy
Performance |
| Timeline |
| Jiangxi Naipu Mining |
| Xinjiang Tianrun Dairy |
Jiangxi Naipu and Xinjiang Tianrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Naipu and Xinjiang Tianrun
The main advantage of trading using opposite Jiangxi Naipu and Xinjiang Tianrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Naipu position performs unexpectedly, Xinjiang Tianrun 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 Xinjiang Tianrun will offset losses from the drop in Xinjiang Tianrun's long position.| Jiangxi Naipu vs. Agricultural Bank of | Jiangxi Naipu vs. Industrial and Commercial | Jiangxi Naipu vs. Bank of China | Jiangxi Naipu vs. PetroChina Co Ltd |
| Xinjiang Tianrun vs. China Petroleum Chemical | Xinjiang Tianrun vs. PetroChina Co Ltd | Xinjiang Tianrun vs. China State Construction | Xinjiang Tianrun vs. China Railway 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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