Correlation Between Jiangxi Lianchuang and Tianshan Aluminum
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By analyzing existing cross correlation between Jiangxi Lianchuang Opto electronic and Tianshan Aluminum Group, you can compare the effects of market volatilities on Jiangxi Lianchuang and Tianshan Aluminum 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 Tianshan Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Lianchuang and Tianshan Aluminum.
Diversification Opportunities for Jiangxi Lianchuang and Tianshan Aluminum
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jiangxi and Tianshan is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Lianchuang Opto electr and Tianshan Aluminum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshan Aluminum 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 Tianshan Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshan Aluminum has no effect on the direction of Jiangxi Lianchuang i.e., Jiangxi Lianchuang and Tianshan Aluminum go up and down completely randomly.
Pair Corralation between Jiangxi Lianchuang and Tianshan Aluminum
Assuming the 90 days trading horizon Jiangxi Lianchuang is expected to generate 1.58 times less return on investment than Tianshan Aluminum. In addition to that, Jiangxi Lianchuang is 1.54 times more volatile than Tianshan Aluminum Group. It trades about 0.2 of its total potential returns per unit of risk. Tianshan Aluminum Group is currently generating about 0.48 per unit of volatility. If you would invest 792.00 in Tianshan Aluminum Group on November 7, 2024 and sell it today you would earn a total of 121.00 from holding Tianshan Aluminum Group or generate 15.28% 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. Tianshan Aluminum Group
Performance |
| Timeline |
| Jiangxi Lianchuang Opto |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tianshan Aluminum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Jiangxi Lianchuang and Tianshan Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Lianchuang and Tianshan Aluminum
The main advantage of trading using opposite Jiangxi Lianchuang and Tianshan Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Lianchuang position performs unexpectedly, Tianshan Aluminum 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 Tianshan Aluminum will offset losses from the drop in Tianshan Aluminum's long position.The idea behind Jiangxi Lianchuang Opto electronic and Tianshan Aluminum Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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