Correlation Between Gansu Jiu and Zhejiang Qianjiang
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By analyzing existing cross correlation between Gansu Jiu Steel and Zhejiang Qianjiang Motorcycle, you can compare the effects of market volatilities on Gansu Jiu and Zhejiang Qianjiang 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 Zhejiang Qianjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Zhejiang Qianjiang.
Diversification Opportunities for Gansu Jiu and Zhejiang Qianjiang
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gansu and Zhejiang is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Zhejiang Qianjiang Motorcycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Qianjiang 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 Zhejiang Qianjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Qianjiang has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Zhejiang Qianjiang go up and down completely randomly.
Pair Corralation between Gansu Jiu and Zhejiang Qianjiang
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 1.79 times more return on investment than Zhejiang Qianjiang. However, Gansu Jiu is 1.79 times more volatile than Zhejiang Qianjiang Motorcycle. It trades about 0.2 of its potential returns per unit of risk. Zhejiang Qianjiang Motorcycle is currently generating about -0.07 per unit of risk. If you would invest 140.00 in Gansu Jiu Steel on September 13, 2024 and sell it today you would earn a total of 53.00 from holding Gansu Jiu Steel or generate 37.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Zhejiang Qianjiang Motorcycle
Performance |
| Timeline |
| Gansu Jiu Steel |
| Zhejiang Qianjiang |
Gansu Jiu and Zhejiang Qianjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Zhejiang Qianjiang
The main advantage of trading using opposite Gansu Jiu and Zhejiang Qianjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Zhejiang Qianjiang 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 Zhejiang Qianjiang will offset losses from the drop in Zhejiang Qianjiang'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 |
| Zhejiang Qianjiang vs. Xiangyu Medical Co | Zhejiang Qianjiang vs. Shenzhen Silver Basis | Zhejiang Qianjiang vs. Cowealth Medical China | Zhejiang Qianjiang vs. Shenzhen Noposion Agrochemicals |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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