Correlation Between Lingyuan Iron and Jingjin Environmental
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By analyzing existing cross correlation between Lingyuan Iron Steel and Jingjin Environmental Protection, you can compare the effects of market volatilities on Lingyuan Iron and Jingjin Environmental 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 Lingyuan Iron with a short position of Jingjin Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lingyuan Iron and Jingjin Environmental.
Diversification Opportunities for Lingyuan Iron and Jingjin Environmental
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lingyuan and Jingjin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lingyuan Iron Steel and Jingjin Environmental Protecti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jingjin Environmental and Lingyuan Iron 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 Lingyuan Iron Steel are associated (or correlated) with Jingjin Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jingjin Environmental has no effect on the direction of Lingyuan Iron i.e., Lingyuan Iron and Jingjin Environmental go up and down completely randomly.
Pair Corralation between Lingyuan Iron and Jingjin Environmental
Assuming the 90 days trading horizon Lingyuan Iron Steel is expected to generate 1.38 times more return on investment than Jingjin Environmental. However, Lingyuan Iron is 1.38 times more volatile than Jingjin Environmental Protection. It trades about 0.01 of its potential returns per unit of risk. Jingjin Environmental Protection is currently generating about -0.08 per unit of risk. If you would invest 216.00 in Lingyuan Iron Steel on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Lingyuan Iron Steel or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lingyuan Iron Steel vs. Jingjin Environmental Protecti
Performance |
| Timeline |
| Lingyuan Iron Steel |
| Jingjin Environmental |
Lingyuan Iron and Jingjin Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lingyuan Iron and Jingjin Environmental
The main advantage of trading using opposite Lingyuan Iron and Jingjin Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lingyuan Iron position performs unexpectedly, Jingjin Environmental 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 Jingjin Environmental will offset losses from the drop in Jingjin Environmental's long position.| Lingyuan Iron vs. Zijin Mining Group | Lingyuan Iron vs. Wanhua Chemical Group | Lingyuan Iron vs. Baoshan Iron Steel | Lingyuan Iron 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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