Correlation Between Gansu Jiu and Jinling Hotel
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By analyzing existing cross correlation between Gansu Jiu Steel and Jinling Hotel Corp, you can compare the effects of market volatilities on Gansu Jiu and Jinling Hotel 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 Jinling Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Jinling Hotel.
Diversification Opportunities for Gansu Jiu and Jinling Hotel
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Jinling is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Jinling Hotel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinling Hotel Corp 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 Jinling Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinling Hotel Corp has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Jinling Hotel go up and down completely randomly.
Pair Corralation between Gansu Jiu and Jinling Hotel
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 10.66 times less return on investment than Jinling Hotel. In addition to that, Gansu Jiu is 1.25 times more volatile than Jinling Hotel Corp. It trades about 0.01 of its total potential returns per unit of risk. Jinling Hotel Corp is currently generating about 0.15 per unit of volatility. If you would invest 716.00 in Jinling Hotel Corp on September 12, 2024 and sell it today you would earn a total of 43.00 from holding Jinling Hotel Corp or generate 6.01% 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. Jinling Hotel Corp
Performance |
| Timeline |
| Gansu Jiu Steel |
| Jinling Hotel Corp |
Gansu Jiu and Jinling Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Jinling Hotel
The main advantage of trading using opposite Gansu Jiu and Jinling Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Jinling Hotel 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 Jinling Hotel will offset losses from the drop in Jinling Hotel'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 |
| Jinling Hotel vs. Lutian Machinery Co | Jinling Hotel vs. PetroChina Co Ltd | Jinling Hotel vs. Bank of China | Jinling Hotel 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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