Correlation Between Changjiang Jinggong and Allwin Telecommunicatio
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By analyzing existing cross correlation between Changjiang Jinggong Steel and Allwin Telecommunication Co, you can compare the effects of market volatilities on Changjiang Jinggong and Allwin Telecommunicatio 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 Changjiang Jinggong with a short position of Allwin Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Jinggong and Allwin Telecommunicatio.
Diversification Opportunities for Changjiang Jinggong and Allwin Telecommunicatio
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changjiang and Allwin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Jinggong Steel and Allwin Telecommunication Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allwin Telecommunicatio and Changjiang Jinggong 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 Changjiang Jinggong Steel are associated (or correlated) with Allwin Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allwin Telecommunicatio has no effect on the direction of Changjiang Jinggong i.e., Changjiang Jinggong and Allwin Telecommunicatio go up and down completely randomly.
Pair Corralation between Changjiang Jinggong and Allwin Telecommunicatio
Assuming the 90 days trading horizon Changjiang Jinggong is expected to generate 11.34 times less return on investment than Allwin Telecommunicatio. But when comparing it to its historical volatility, Changjiang Jinggong Steel is 2.38 times less risky than Allwin Telecommunicatio. It trades about 0.02 of its potential returns per unit of risk. Allwin Telecommunication Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 509.00 in Allwin Telecommunication Co on November 7, 2024 and sell it today you would earn a total of 23.00 from holding Allwin Telecommunication Co or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changjiang Jinggong Steel vs. Allwin Telecommunication Co
Performance |
| Timeline |
| Changjiang Jinggong Steel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Allwin Telecommunicatio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Changjiang Jinggong and Allwin Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changjiang Jinggong and Allwin Telecommunicatio
The main advantage of trading using opposite Changjiang Jinggong and Allwin Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Jinggong position performs unexpectedly, Allwin Telecommunicatio 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 Allwin Telecommunicatio will offset losses from the drop in Allwin Telecommunicatio's long position.The idea behind Changjiang Jinggong Steel and Allwin Telecommunication Co 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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