Correlation Between Gansu Jiu and New Hope
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By analyzing existing cross correlation between Gansu Jiu Steel and New Hope Dairy, you can compare the effects of market volatilities on Gansu Jiu and New Hope 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 New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and New Hope.
Diversification Opportunities for Gansu Jiu and New Hope
Almost no diversification
The 3 months correlation between Gansu and New is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and New Hope Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope Dairy 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 New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope Dairy has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and New Hope go up and down completely randomly.
Pair Corralation between Gansu Jiu and New Hope
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 0.84 times more return on investment than New Hope. However, Gansu Jiu Steel is 1.19 times less risky than New Hope. It trades about 0.01 of its potential returns per unit of risk. New Hope Dairy is currently generating about -0.01 per unit of risk. If you would invest 167.00 in Gansu Jiu Steel on August 31, 2024 and sell it today you would lose (2.00) from holding Gansu Jiu Steel or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. New Hope Dairy
Performance |
| Timeline |
| Gansu Jiu Steel |
| New Hope Dairy |
Gansu Jiu and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and New Hope
The main advantage of trading using opposite Gansu Jiu and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope's long position.| Gansu Jiu vs. China Sports Industry | Gansu Jiu vs. Sichuan Fulin Transportation | Gansu Jiu vs. Guizhou Chanhen Chemical | Gansu Jiu vs. Lianhe Chemical Technology |
| New Hope vs. Lutian Machinery Co | New Hope vs. PetroChina Co Ltd | New Hope vs. Bank of China | New Hope 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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