Correlation Between Jiujiang Shanshui and Luzhou Lao
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By analyzing existing cross correlation between Jiujiang Shanshui Technology and Luzhou Lao Jiao, you can compare the effects of market volatilities on Jiujiang Shanshui and Luzhou Lao 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 Jiujiang Shanshui with a short position of Luzhou Lao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiujiang Shanshui and Luzhou Lao.
Diversification Opportunities for Jiujiang Shanshui and Luzhou Lao
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiujiang and Luzhou is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Jiujiang Shanshui Technology and Luzhou Lao Jiao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luzhou Lao Jiao and Jiujiang Shanshui 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 Jiujiang Shanshui Technology are associated (or correlated) with Luzhou Lao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luzhou Lao Jiao has no effect on the direction of Jiujiang Shanshui i.e., Jiujiang Shanshui and Luzhou Lao go up and down completely randomly.
Pair Corralation between Jiujiang Shanshui and Luzhou Lao
Assuming the 90 days trading horizon Jiujiang Shanshui Technology is expected to generate 0.98 times more return on investment than Luzhou Lao. However, Jiujiang Shanshui Technology is 1.02 times less risky than Luzhou Lao. It trades about -0.01 of its potential returns per unit of risk. Luzhou Lao Jiao is currently generating about -0.04 per unit of risk. If you would invest 1,946 in Jiujiang Shanshui Technology on September 1, 2024 and sell it today you would lose (316.00) from holding Jiujiang Shanshui Technology or give up 16.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.77% |
| Values | Daily Returns |
Jiujiang Shanshui Technology vs. Luzhou Lao Jiao
Performance |
| Timeline |
| Jiujiang Shanshui |
| Luzhou Lao Jiao |
Jiujiang Shanshui and Luzhou Lao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiujiang Shanshui and Luzhou Lao
The main advantage of trading using opposite Jiujiang Shanshui and Luzhou Lao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiujiang Shanshui position performs unexpectedly, Luzhou Lao 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 Luzhou Lao will offset losses from the drop in Luzhou Lao's long position.| Jiujiang Shanshui vs. Zijin Mining Group | Jiujiang Shanshui vs. Baoshan Iron Steel | Jiujiang Shanshui vs. Shandong Gold Mining | Jiujiang Shanshui vs. Rongsheng Petrochemical Co |
| Luzhou Lao vs. China Petroleum Chemical | Luzhou Lao vs. PetroChina Co Ltd | Luzhou Lao vs. China State Construction | Luzhou Lao 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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