Correlation Between Gansu Jiu and Liaoning Chengda
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By analyzing existing cross correlation between Gansu Jiu Steel and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Gansu Jiu and Liaoning Chengda 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 Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Liaoning Chengda.
Diversification Opportunities for Gansu Jiu and Liaoning Chengda
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gansu and Liaoning is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio 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 Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Gansu Jiu and Liaoning Chengda
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to under-perform the Liaoning Chengda. In addition to that, Gansu Jiu is 2.12 times more volatile than Liaoning Chengda Biotechnology. It trades about -0.49 of its total potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about -0.51 per unit of volatility. If you would invest 2,772 in Liaoning Chengda Biotechnology on October 9, 2024 and sell it today you would lose (273.00) from holding Liaoning Chengda Biotechnology or give up 9.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Jiu Steel vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Gansu Jiu Steel |
| Liaoning Chengda Bio |
Gansu Jiu and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Jiu and Liaoning Chengda
The main advantage of trading using opposite Gansu Jiu and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.| Gansu Jiu vs. Zijin Mining Group | Gansu Jiu vs. Wanhua Chemical Group | Gansu Jiu vs. Baoshan Iron Steel | Gansu Jiu vs. Shandong Gold Mining |
| Liaoning Chengda vs. Ming Yang Smart | Liaoning Chengda vs. 159681 | Liaoning Chengda vs. 159005 | Liaoning Chengda vs. Loctek Ergonomic Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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