Correlation Between Jiangsu Zhongtian and Shanghai Yaoji
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By analyzing existing cross correlation between Jiangsu Zhongtian Technology and Shanghai Yaoji Playing, you can compare the effects of market volatilities on Jiangsu Zhongtian and Shanghai Yaoji 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 Jiangsu Zhongtian with a short position of Shanghai Yaoji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Zhongtian and Shanghai Yaoji.
Diversification Opportunities for Jiangsu Zhongtian and Shanghai Yaoji
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jiangsu and Shanghai is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Zhongtian Technology and Shanghai Yaoji Playing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yaoji Playing and Jiangsu Zhongtian 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 Jiangsu Zhongtian Technology are associated (or correlated) with Shanghai Yaoji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yaoji Playing has no effect on the direction of Jiangsu Zhongtian i.e., Jiangsu Zhongtian and Shanghai Yaoji go up and down completely randomly.
Pair Corralation between Jiangsu Zhongtian and Shanghai Yaoji
Assuming the 90 days trading horizon Jiangsu Zhongtian Technology is expected to under-perform the Shanghai Yaoji. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Zhongtian Technology is 2.02 times less risky than Shanghai Yaoji. The stock trades about -0.13 of its potential returns per unit of risk. The Shanghai Yaoji Playing is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,734 in Shanghai Yaoji Playing on October 28, 2024 and sell it today you would earn a total of 116.00 from holding Shanghai Yaoji Playing or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Zhongtian Technology vs. Shanghai Yaoji Playing
Performance |
| Timeline |
| Jiangsu Zhongtian |
| Shanghai Yaoji Playing |
Jiangsu Zhongtian and Shanghai Yaoji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Zhongtian and Shanghai Yaoji
The main advantage of trading using opposite Jiangsu Zhongtian and Shanghai Yaoji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Zhongtian position performs unexpectedly, Shanghai Yaoji 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 Shanghai Yaoji will offset losses from the drop in Shanghai Yaoji's long position.The idea behind Jiangsu Zhongtian Technology and Shanghai Yaoji Playing 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.
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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