Correlation Between Shanxi Lanhua and Jiujiang Shanshui
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By analyzing existing cross correlation between Shanxi Lanhua Sci Tech and Jiujiang Shanshui Technology, you can compare the effects of market volatilities on Shanxi Lanhua and Jiujiang Shanshui 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 Shanxi Lanhua with a short position of Jiujiang Shanshui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanxi Lanhua and Jiujiang Shanshui.
Diversification Opportunities for Shanxi Lanhua and Jiujiang Shanshui
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanxi and Jiujiang is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Shanxi Lanhua Sci Tech and Jiujiang Shanshui Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiujiang Shanshui and Shanxi Lanhua 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 Shanxi Lanhua Sci Tech are associated (or correlated) with Jiujiang Shanshui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiujiang Shanshui has no effect on the direction of Shanxi Lanhua i.e., Shanxi Lanhua and Jiujiang Shanshui go up and down completely randomly.
Pair Corralation between Shanxi Lanhua and Jiujiang Shanshui
Assuming the 90 days trading horizon Shanxi Lanhua Sci Tech is expected to generate 0.92 times more return on investment than Jiujiang Shanshui. However, Shanxi Lanhua Sci Tech is 1.08 times less risky than Jiujiang Shanshui. It trades about 0.0 of its potential returns per unit of risk. Jiujiang Shanshui Technology is currently generating about -0.02 per unit of risk. 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 |
Shanxi Lanhua Sci Tech vs. Jiujiang Shanshui Technology
Performance |
| Timeline |
| Shanxi Lanhua Sci |
| Jiujiang Shanshui |
Shanxi Lanhua and Jiujiang Shanshui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanxi Lanhua and Jiujiang Shanshui
The main advantage of trading using opposite Shanxi Lanhua and Jiujiang Shanshui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanxi Lanhua position performs unexpectedly, Jiujiang Shanshui 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 Jiujiang Shanshui will offset losses from the drop in Jiujiang Shanshui's long position.| Shanxi Lanhua vs. Tongyu Communication | Shanxi Lanhua vs. Guangdong Shenglu Telecommunication | Shanxi Lanhua vs. Xinjiang Communications Construction | Shanxi Lanhua vs. Zhongshan Public Utilities |
| Jiujiang Shanshui vs. Zijin Mining Group | Jiujiang Shanshui vs. Baoshan Iron Steel | Jiujiang Shanshui vs. Shandong Gold Mining | Jiujiang Shanshui vs. Rongsheng Petrochemical Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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