Correlation Between Gansu Jiu and Xiangyang Automobile
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By analyzing existing cross correlation between Gansu Jiu Steel and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Gansu Jiu and Xiangyang Automobile 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 Gansu Jiu with a short position of Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Xiangyang Automobile.
Diversification Opportunities for Gansu Jiu and Xiangyang Automobile
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Xiangyang is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Gansu Jiu and Xiangyang Automobile
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 2.42 times less return on investment than Xiangyang Automobile. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.42 times less risky than Xiangyang Automobile. It trades about 0.15 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 638.00 in Xiangyang Automobile Bearing on September 13, 2024 and sell it today you would earn a total of 129.00 from holding Xiangyang Automobile Bearing or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Xiangyang Automobile Bearing
Performance |
| Timeline |
| Gansu Jiu Steel |
| Xiangyang Automobile |
Gansu Jiu and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Xiangyang Automobile
The main advantage of trading using opposite Gansu Jiu and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.| Gansu Jiu vs. China Construction Bank | Gansu Jiu vs. Industrial Bank Co | Gansu Jiu vs. Gansu Huangtai Wine marketing | Gansu Jiu vs. Guosheng Financial Holding |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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