Correlation Between Gansu Jiu and Renxin New
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By analyzing existing cross correlation between Gansu Jiu Steel and Renxin New Material, you can compare the effects of market volatilities on Gansu Jiu and Renxin New 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 Renxin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Renxin New.
Diversification Opportunities for Gansu Jiu and Renxin New
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Renxin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Renxin New Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renxin New Material 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 Renxin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renxin New Material has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Renxin New go up and down completely randomly.
Pair Corralation between Gansu Jiu and Renxin New
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 1.09 times more return on investment than Renxin New. However, Gansu Jiu is 1.09 times more volatile than Renxin New Material. It trades about 0.07 of its potential returns per unit of risk. Renxin New Material is currently generating about 0.07 per unit of risk. If you would invest 118.00 in Gansu Jiu Steel on November 3, 2024 and sell it today you would earn a total of 29.00 from holding Gansu Jiu Steel or generate 24.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Renxin New Material
Performance |
| Timeline |
| Gansu Jiu Steel |
| Renxin New Material |
Gansu Jiu and Renxin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Renxin New
The main advantage of trading using opposite Gansu Jiu and Renxin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Renxin New 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 Renxin New will offset losses from the drop in Renxin New's long position.| Gansu Jiu vs. Ningxia Younglight Chemicals | Gansu Jiu vs. V V Food | Gansu Jiu vs. Shandong Polymer Biochemicals | Gansu Jiu vs. Yan Tai Shuang |
| Renxin New vs. Glodon Software Co | Renxin New vs. Hangzhou Pinming Software | Renxin New vs. Peoples Insurance of | Renxin New vs. Industrial Bank Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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