Correlation Between Liuzhou Chemical and Jiangsu Financial
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Jiangsu Financial Leasing, you can compare the effects of market volatilities on Liuzhou Chemical and Jiangsu Financial 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 Liuzhou Chemical with a short position of Jiangsu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Jiangsu Financial.
Diversification Opportunities for Liuzhou Chemical and Jiangsu Financial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liuzhou and Jiangsu is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Jiangsu Financial Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Financial Leasing and Liuzhou Chemical 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 Liuzhou Chemical Industry are associated (or correlated) with Jiangsu Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Financial Leasing has no effect on the direction of Liuzhou Chemical i.e., Liuzhou Chemical and Jiangsu Financial go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Jiangsu Financial
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 2.19 times more return on investment than Jiangsu Financial. However, Liuzhou Chemical is 2.19 times more volatile than Jiangsu Financial Leasing. It trades about 0.35 of its potential returns per unit of risk. Jiangsu Financial Leasing is currently generating about 0.04 per unit of risk. If you would invest 281.00 in Liuzhou Chemical Industry on September 18, 2024 and sell it today you would earn a total of 52.00 from holding Liuzhou Chemical Industry or generate 18.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. Jiangsu Financial Leasing
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Jiangsu Financial Leasing |
Liuzhou Chemical and Jiangsu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Jiangsu Financial
The main advantage of trading using opposite Liuzhou Chemical and Jiangsu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical position performs unexpectedly, Jiangsu Financial 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 Jiangsu Financial will offset losses from the drop in Jiangsu Financial's long position.| Liuzhou Chemical vs. Zijin Mining Group | Liuzhou Chemical vs. Wanhua Chemical Group | Liuzhou Chemical vs. Baoshan Iron Steel | Liuzhou Chemical vs. Shandong Gold Mining |
| Jiangsu Financial vs. Kweichow Moutai Co | Jiangsu Financial vs. Shenzhen Mindray Bio Medical | Jiangsu Financial vs. G bits Network Technology | Jiangsu Financial vs. Shenzhen Transsion Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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