Correlation Between Gansu Jiu and Chahua Modern
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By analyzing existing cross correlation between Gansu Jiu Steel and Chahua Modern Housewares, you can compare the effects of market volatilities on Gansu Jiu and Chahua Modern 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 Chahua Modern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Chahua Modern.
Diversification Opportunities for Gansu Jiu and Chahua Modern
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gansu and Chahua is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Chahua Modern Housewares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chahua Modern Housewares 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 Chahua Modern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chahua Modern Housewares has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Chahua Modern go up and down completely randomly.
Pair Corralation between Gansu Jiu and Chahua Modern
Assuming the 90 days trading horizon Gansu Jiu is expected to generate 3.61 times less return on investment than Chahua Modern. But when comparing it to its historical volatility, Gansu Jiu Steel is 1.76 times less risky than Chahua Modern. It trades about 0.04 of its potential returns per unit of risk. Chahua Modern Housewares is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 946.00 in Chahua Modern Housewares on September 12, 2024 and sell it today you would earn a total of 1,054 from holding Chahua Modern Housewares or generate 111.42% 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. Chahua Modern Housewares
Performance |
| Timeline |
| Gansu Jiu Steel |
| Chahua Modern Housewares |
Gansu Jiu and Chahua Modern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Chahua Modern
The main advantage of trading using opposite Gansu Jiu and Chahua Modern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Chahua Modern 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 Chahua Modern will offset losses from the drop in Chahua Modern'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 |
| Chahua Modern vs. Lutian Machinery Co | Chahua Modern vs. PetroChina Co Ltd | Chahua Modern vs. Bank of China | Chahua Modern 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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