Correlation Between Shanghai Pudong and Jinlong Machinery
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By analyzing existing cross correlation between Shanghai Pudong Development and Jinlong Machinery Electronic, you can compare the effects of market volatilities on Shanghai Pudong and Jinlong Machinery 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 Shanghai Pudong with a short position of Jinlong Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and Jinlong Machinery.
Diversification Opportunities for Shanghai Pudong and Jinlong Machinery
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shanghai and Jinlong is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and Jinlong Machinery Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinlong Machinery and Shanghai Pudong 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 Shanghai Pudong Development are associated (or correlated) with Jinlong Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinlong Machinery has no effect on the direction of Shanghai Pudong i.e., Shanghai Pudong and Jinlong Machinery go up and down completely randomly.
Pair Corralation between Shanghai Pudong and Jinlong Machinery
Assuming the 90 days trading horizon Shanghai Pudong Development is expected to generate 0.31 times more return on investment than Jinlong Machinery. However, Shanghai Pudong Development is 3.26 times less risky than Jinlong Machinery. It trades about 0.07 of its potential returns per unit of risk. Jinlong Machinery Electronic is currently generating about 0.01 per unit of risk. If you would invest 704.00 in Shanghai Pudong Development on October 11, 2024 and sell it today you would earn a total of 326.00 from holding Shanghai Pudong Development or generate 46.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Pudong Development vs. Jinlong Machinery Electronic
Performance |
| Timeline |
| Shanghai Pudong Deve |
| Jinlong Machinery |
Shanghai Pudong and Jinlong Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and Jinlong Machinery
The main advantage of trading using opposite Shanghai Pudong and Jinlong Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong position performs unexpectedly, Jinlong Machinery 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 Jinlong Machinery will offset losses from the drop in Jinlong Machinery's long position.| Shanghai Pudong vs. Hunan Tyen Machinery | Shanghai Pudong vs. CareRay Digital Medical | Shanghai Pudong vs. Xiangyu Medical Co | Shanghai Pudong vs. Allied Machinery Co |
| Jinlong Machinery vs. Tsingtao Brewery Co | Jinlong Machinery vs. Suzhou Weizhixiang Food | Jinlong Machinery vs. Xiangpiaopiao Food Co | Jinlong Machinery vs. Dazhong Transportation 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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