Correlation Between Gansu Jiu and Fujian Newland
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By analyzing existing cross correlation between Gansu Jiu Steel and Fujian Newland Computer, you can compare the effects of market volatilities on Gansu Jiu and Fujian Newland 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 Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Fujian Newland.
Diversification Opportunities for Gansu Jiu and Fujian Newland
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gansu and Fujian is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer 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 Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Fujian Newland go up and down completely randomly.
Pair Corralation between Gansu Jiu and Fujian Newland
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 1.91 times less return on investment than Fujian Newland. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.28 times less risky than Fujian Newland. It trades about 0.03 of its potential returns per unit of risk. Fujian Newland Computer is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,685 in Fujian Newland Computer on September 12, 2024 and sell it today you would earn a total of 477.00 from holding Fujian Newland Computer or generate 28.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Fujian Newland Computer
Performance |
| Timeline |
| Gansu Jiu Steel |
| Fujian Newland Computer |
Gansu Jiu and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Fujian Newland
The main advantage of trading using opposite Gansu Jiu and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| Gansu Jiu vs. Zijin Mining Group | Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Baoshan Iron Steel | Gansu Jiu vs. Rongsheng Petrochemical Co |
| Fujian Newland vs. Gansu Jiu Steel | Fujian Newland vs. Shandong Mining Machinery | Fujian Newland vs. Aba Chemicals Corp | Fujian Newland vs. BlueFocus Communication 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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