Correlation Between Gansu Jiu and Hunan Mendale
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By analyzing existing cross correlation between Gansu Jiu Steel and Hunan Mendale Hometextile, you can compare the effects of market volatilities on Gansu Jiu and Hunan Mendale 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 Hunan Mendale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Hunan Mendale.
Diversification Opportunities for Gansu Jiu and Hunan Mendale
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Hunan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Hunan Mendale Hometextile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Mendale Hometextile 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 Hunan Mendale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Mendale Hometextile has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Hunan Mendale go up and down completely randomly.
Pair Corralation between Gansu Jiu and Hunan Mendale
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 30.44 times less return on investment than Hunan Mendale. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.24 times less risky than Hunan Mendale. It trades about 0.01 of its potential returns per unit of risk. Hunan Mendale Hometextile is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 281.00 in Hunan Mendale Hometextile on September 12, 2024 and sell it today you would earn a total of 54.00 from holding Hunan Mendale Hometextile or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Hunan Mendale Hometextile
Performance |
| Timeline |
| Gansu Jiu Steel |
| Hunan Mendale Hometextile |
Gansu Jiu and Hunan Mendale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Hunan Mendale
The main advantage of trading using opposite Gansu Jiu and Hunan Mendale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Hunan Mendale 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 Hunan Mendale will offset losses from the drop in Hunan Mendale'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 |
| Hunan Mendale vs. Lutian Machinery Co | Hunan Mendale vs. PetroChina Co Ltd | Hunan Mendale vs. Bank of China | Hunan Mendale vs. Gansu Jiu Steel |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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