Correlation Between Gansu Jiu and Xiamen Goldenhome
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By analyzing existing cross correlation between Gansu Jiu Steel and Xiamen Goldenhome Co, you can compare the effects of market volatilities on Gansu Jiu and Xiamen Goldenhome 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 Xiamen Goldenhome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Xiamen Goldenhome.
Diversification Opportunities for Gansu Jiu and Xiamen Goldenhome
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Xiamen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Xiamen Goldenhome Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Goldenhome 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 Xiamen Goldenhome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Goldenhome has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Xiamen Goldenhome go up and down completely randomly.
Pair Corralation between Gansu Jiu and Xiamen Goldenhome
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 1.22 times more return on investment than Xiamen Goldenhome. However, Gansu Jiu is 1.22 times more volatile than Xiamen Goldenhome Co. It trades about 0.15 of its potential returns per unit of risk. Xiamen Goldenhome Co is currently generating about 0.08 per unit of risk. If you would invest 179.00 in Gansu Jiu Steel on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Gansu Jiu Steel or generate 7.82% 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. Xiamen Goldenhome Co
Performance |
| Timeline |
| Gansu Jiu Steel |
| Xiamen Goldenhome |
Gansu Jiu and Xiamen Goldenhome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Xiamen Goldenhome
The main advantage of trading using opposite Gansu Jiu and Xiamen Goldenhome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Xiamen Goldenhome 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 Xiamen Goldenhome will offset losses from the drop in Xiamen Goldenhome'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 |
| Xiamen Goldenhome vs. Lutian Machinery Co | Xiamen Goldenhome vs. China Longyuan Power | Xiamen Goldenhome vs. PetroChina Co Ltd | Xiamen Goldenhome vs. Bank of China |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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