Correlation Between Jiangxi Lianchuang and Zhongshan Broad
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By analyzing existing cross correlation between Jiangxi Lianchuang Opto electronic and Zhongshan Broad Ocean Motor, you can compare the effects of market volatilities on Jiangxi Lianchuang and Zhongshan Broad 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 Zhongshan Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Lianchuang and Zhongshan Broad.
Diversification Opportunities for Jiangxi Lianchuang and Zhongshan Broad
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangxi and Zhongshan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Lianchuang Opto electr and Zhongshan Broad Ocean Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Broad Ocean 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 Zhongshan Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Broad Ocean has no effect on the direction of Jiangxi Lianchuang i.e., Jiangxi Lianchuang and Zhongshan Broad go up and down completely randomly.
Pair Corralation between Jiangxi Lianchuang and Zhongshan Broad
Assuming the 90 days trading horizon Jiangxi Lianchuang Opto electronic is expected to generate 0.97 times more return on investment than Zhongshan Broad. However, Jiangxi Lianchuang Opto electronic is 1.03 times less risky than Zhongshan Broad. It trades about 0.06 of its potential returns per unit of risk. Zhongshan Broad Ocean Motor is currently generating about 0.04 per unit of risk. If you would invest 4,445 in Jiangxi Lianchuang Opto electronic on October 19, 2024 and sell it today you would earn a total of 149.00 from holding Jiangxi Lianchuang Opto electronic or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Lianchuang Opto electr vs. Zhongshan Broad Ocean Motor
Performance |
| Timeline |
| Jiangxi Lianchuang Opto |
| Zhongshan Broad Ocean |
Jiangxi Lianchuang and Zhongshan Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Lianchuang and Zhongshan Broad
The main advantage of trading using opposite Jiangxi Lianchuang and Zhongshan Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Lianchuang position performs unexpectedly, Zhongshan Broad 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 Zhongshan Broad will offset losses from the drop in Zhongshan Broad's long position.| Jiangxi Lianchuang vs. Haima Automobile Group | Jiangxi Lianchuang vs. Hangzhou Gisway Information | Jiangxi Lianchuang vs. Anhui Jianghuai Automobile | Jiangxi Lianchuang vs. Longmaster Information Tech |
| Zhongshan Broad vs. Shengda Mining Co | Zhongshan Broad vs. Threes Company Media | Zhongshan Broad vs. JiShi Media Co | Zhongshan Broad vs. Mango Excellent Media |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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