Correlation Between Gansu Jiu and Zhejiang Yinlun
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By analyzing existing cross correlation between Gansu Jiu Steel and Zhejiang Yinlun Machinery, you can compare the effects of market volatilities on Gansu Jiu and Zhejiang Yinlun 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 Yinlun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Zhejiang Yinlun.
Diversification Opportunities for Gansu Jiu and Zhejiang Yinlun
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Zhejiang is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Zhejiang Yinlun Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yinlun Machinery 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 Yinlun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yinlun Machinery has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Zhejiang Yinlun go up and down completely randomly.
Pair Corralation between Gansu Jiu and Zhejiang Yinlun
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 2.43 times less return on investment than Zhejiang Yinlun. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.29 times less risky than Zhejiang Yinlun. It trades about 0.02 of its potential returns per unit of risk. Zhejiang Yinlun Machinery is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,192 in Zhejiang Yinlun Machinery on September 13, 2024 and sell it today you would earn a total of 584.00 from holding Zhejiang Yinlun Machinery or generate 48.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Zhejiang Yinlun Machinery
Performance |
| Timeline |
| Gansu Jiu Steel |
| Zhejiang Yinlun Machinery |
Gansu Jiu and Zhejiang Yinlun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Zhejiang Yinlun
The main advantage of trading using opposite Gansu Jiu and Zhejiang Yinlun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Zhejiang Yinlun 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 Yinlun will offset losses from the drop in Zhejiang Yinlun'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 |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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