Correlation Between Gansu Jiu and Ningbo Jianan
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By analyzing existing cross correlation between Gansu Jiu Steel and Ningbo Jianan Electronics, you can compare the effects of market volatilities on Gansu Jiu and Ningbo Jianan 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 Ningbo Jianan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Ningbo Jianan.
Diversification Opportunities for Gansu Jiu and Ningbo Jianan
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Ningbo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Ningbo Jianan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Jianan Electronics 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 Ningbo Jianan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Jianan Electronics has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Ningbo Jianan go up and down completely randomly.
Pair Corralation between Gansu Jiu and Ningbo Jianan
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 0.94 times more return on investment than Ningbo Jianan. However, Gansu Jiu Steel is 1.07 times less risky than Ningbo Jianan. It trades about 0.21 of its potential returns per unit of risk. Ningbo Jianan Electronics is currently generating about 0.17 per unit of risk. If you would invest 124.00 in Gansu Jiu Steel on September 13, 2024 and sell it today you would earn a total of 69.00 from holding Gansu Jiu Steel or generate 55.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Ningbo Jianan Electronics
Performance |
| Timeline |
| Gansu Jiu Steel |
| Ningbo Jianan Electronics |
Gansu Jiu and Ningbo Jianan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Ningbo Jianan
The main advantage of trading using opposite Gansu Jiu and Ningbo Jianan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Ningbo Jianan 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 Ningbo Jianan will offset losses from the drop in Ningbo Jianan'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 |
| Ningbo Jianan vs. Nanjing Putian Telecommunications | Ningbo Jianan vs. Tianjin Realty Development | Ningbo Jianan vs. Kangyue Technology Co | Ningbo Jianan vs. Shenzhen Hifuture Electric |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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