Correlation Between Jiangxi Lianchuang and Xiamen Insight
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By analyzing existing cross correlation between Jiangxi Lianchuang Opto electronic and Xiamen Insight Investment, you can compare the effects of market volatilities on Jiangxi Lianchuang and Xiamen Insight 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 Jiangxi Lianchuang with a short position of Xiamen Insight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Lianchuang and Xiamen Insight.
Diversification Opportunities for Jiangxi Lianchuang and Xiamen Insight
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jiangxi and Xiamen is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Lianchuang Opto electr and Xiamen Insight Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Insight Investment and Jiangxi Lianchuang 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 Jiangxi Lianchuang Opto electronic are associated (or correlated) with Xiamen Insight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Insight Investment has no effect on the direction of Jiangxi Lianchuang i.e., Jiangxi Lianchuang and Xiamen Insight go up and down completely randomly.
Pair Corralation between Jiangxi Lianchuang and Xiamen Insight
Assuming the 90 days trading horizon Jiangxi Lianchuang Opto electronic is expected to generate 0.93 times more return on investment than Xiamen Insight. However, Jiangxi Lianchuang Opto electronic is 1.07 times less risky than Xiamen Insight. It trades about 0.21 of its potential returns per unit of risk. Xiamen Insight Investment is currently generating about 0.12 per unit of risk. If you would invest 4,412 in Jiangxi Lianchuang Opto electronic on November 7, 2024 and sell it today you would earn a total of 421.00 from holding Jiangxi Lianchuang Opto electronic or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Lianchuang Opto electr vs. Xiamen Insight Investment
Performance |
| Timeline |
| Jiangxi Lianchuang Opto |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xiamen Insight Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jiangxi Lianchuang and Xiamen Insight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Lianchuang and Xiamen Insight
The main advantage of trading using opposite Jiangxi Lianchuang and Xiamen Insight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Lianchuang position performs unexpectedly, Xiamen Insight 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 Insight will offset losses from the drop in Xiamen Insight's long position.The idea behind Jiangxi Lianchuang Opto electronic and Xiamen Insight Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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