Correlation Between Gansu Jiu and Long Yuan
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By analyzing existing cross correlation between Gansu Jiu Steel and Long Yuan Construction, you can compare the effects of market volatilities on Gansu Jiu and Long Yuan 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 Long Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Long Yuan.
Diversification Opportunities for Gansu Jiu and Long Yuan
Poor diversification
The 3 months correlation between Gansu and Long is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Long Yuan Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Yuan Construction 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 Long Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Yuan Construction has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Long Yuan go up and down completely randomly.
Pair Corralation between Gansu Jiu and Long Yuan
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to under-perform the Long Yuan. But the stock apears to be less risky and, when comparing its historical volatility, Gansu Jiu Steel is 1.3 times less risky than Long Yuan. The stock trades about -0.25 of its potential returns per unit of risk. The Long Yuan Construction is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 385.00 in Long Yuan Construction on October 23, 2024 and sell it today you would lose (26.00) from holding Long Yuan Construction or give up 6.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Long Yuan Construction
Performance |
| Timeline |
| Gansu Jiu Steel |
| Long Yuan Construction |
Gansu Jiu and Long Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Long Yuan
The main advantage of trading using opposite Gansu Jiu and Long Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Long Yuan 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 Long Yuan will offset losses from the drop in Long Yuan's long position.| Gansu Jiu vs. GRINM Semiconductor Materials | Gansu Jiu vs. TianJin 712 Communication | Gansu Jiu vs. Bank of Communications | Gansu Jiu vs. China Sports Industry |
| Long Yuan vs. Chengdu Kanghua Biological | Long Yuan vs. Beijing Wantai Biological | Long Yuan vs. Suzhou Novoprotein Scientific | Long Yuan vs. Aluminum Corp of |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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