Correlation Between Jiujiang Shanshui and Shanxi Lanhua
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By analyzing existing cross correlation between Jiujiang Shanshui Technology and Shanxi Lanhua Sci Tech, you can compare the effects of market volatilities on Jiujiang Shanshui and Shanxi Lanhua 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 Shanxi Lanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiujiang Shanshui and Shanxi Lanhua.
Diversification Opportunities for Jiujiang Shanshui and Shanxi Lanhua
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jiujiang and Shanxi is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Jiujiang Shanshui Technology and Shanxi Lanhua Sci Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanxi Lanhua Sci 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 Shanxi Lanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanxi Lanhua Sci has no effect on the direction of Jiujiang Shanshui i.e., Jiujiang Shanshui and Shanxi Lanhua go up and down completely randomly.
Pair Corralation between Jiujiang Shanshui and Shanxi Lanhua
Assuming the 90 days trading horizon Jiujiang Shanshui Technology is expected to under-perform the Shanxi Lanhua. In addition to that, Jiujiang Shanshui is 1.08 times more volatile than Shanxi Lanhua Sci Tech. It trades about -0.02 of its total potential returns per unit of risk. Shanxi Lanhua Sci Tech is currently generating about 0.0 per unit of volatility. If you would invest 968.00 in Shanxi Lanhua Sci Tech on September 21, 2024 and sell it today you would lose (75.00) from holding Shanxi Lanhua Sci Tech or give up 7.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiujiang Shanshui Technology vs. Shanxi Lanhua Sci Tech
Performance |
| Timeline |
| Jiujiang Shanshui |
| Shanxi Lanhua Sci |
Jiujiang Shanshui and Shanxi Lanhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiujiang Shanshui and Shanxi Lanhua
The main advantage of trading using opposite Jiujiang Shanshui and Shanxi Lanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiujiang Shanshui position performs unexpectedly, Shanxi Lanhua 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 Shanxi Lanhua will offset losses from the drop in Shanxi Lanhua'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 |
| Shanxi Lanhua vs. Tongyu Communication | Shanxi Lanhua vs. Guangdong Shenglu Telecommunication | Shanxi Lanhua vs. Xinjiang Communications Construction | Shanxi Lanhua vs. Zhongshan Public Utilities |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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