Correlation Between China National and Jinlong Machinery
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By analyzing existing cross correlation between China National Software and Jinlong Machinery Electronic, you can compare the effects of market volatilities on China National and Jinlong Machinery 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 China National with a short position of Jinlong Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China National and Jinlong Machinery.
Diversification Opportunities for China National and Jinlong Machinery
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Jinlong is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding China National Software and Jinlong Machinery Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinlong Machinery and China National 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 China National Software are associated (or correlated) with Jinlong Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinlong Machinery has no effect on the direction of China National i.e., China National and Jinlong Machinery go up and down completely randomly.
Pair Corralation between China National and Jinlong Machinery
Assuming the 90 days trading horizon China National Software is expected to generate 0.71 times more return on investment than Jinlong Machinery. However, China National Software is 1.41 times less risky than Jinlong Machinery. It trades about 0.04 of its potential returns per unit of risk. Jinlong Machinery Electronic is currently generating about -0.01 per unit of risk. If you would invest 3,780 in China National Software on October 16, 2024 and sell it today you would earn a total of 737.00 from holding China National Software or generate 19.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China National Software vs. Jinlong Machinery Electronic
Performance |
| Timeline |
| China National Software |
| Jinlong Machinery |
China National and Jinlong Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China National and Jinlong Machinery
The main advantage of trading using opposite China National and Jinlong Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China National position performs unexpectedly, Jinlong Machinery 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 Jinlong Machinery will offset losses from the drop in Jinlong Machinery's long position.| China National vs. Masterwork Machinery | China National vs. China World Trade | China National vs. Ningbo Construction Co | China National vs. Jinlong Machinery Electronic |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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