Correlation Between Dalian Thermal and Jiangsu Zhongtian
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By analyzing existing cross correlation between Dalian Thermal Power and Jiangsu Zhongtian Technology, you can compare the effects of market volatilities on Dalian Thermal and Jiangsu Zhongtian 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 Dalian Thermal with a short position of Jiangsu Zhongtian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Jiangsu Zhongtian.
Diversification Opportunities for Dalian Thermal and Jiangsu Zhongtian
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dalian and Jiangsu is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Jiangsu Zhongtian Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Zhongtian and Dalian Thermal 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 Dalian Thermal Power are associated (or correlated) with Jiangsu Zhongtian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Zhongtian has no effect on the direction of Dalian Thermal i.e., Dalian Thermal and Jiangsu Zhongtian go up and down completely randomly.
Pair Corralation between Dalian Thermal and Jiangsu Zhongtian
Assuming the 90 days trading horizon Dalian Thermal Power is expected to under-perform the Jiangsu Zhongtian. In addition to that, Dalian Thermal is 2.15 times more volatile than Jiangsu Zhongtian Technology. It trades about -0.11 of its total potential returns per unit of risk. Jiangsu Zhongtian Technology is currently generating about -0.09 per unit of volatility. If you would invest 1,565 in Jiangsu Zhongtian Technology on September 25, 2024 and sell it today you would lose (54.00) from holding Jiangsu Zhongtian Technology or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalian Thermal Power vs. Jiangsu Zhongtian Technology
Performance |
| Timeline |
| Dalian Thermal Power |
| Jiangsu Zhongtian |
Dalian Thermal and Jiangsu Zhongtian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Jiangsu Zhongtian
The main advantage of trading using opposite Dalian Thermal and Jiangsu Zhongtian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal position performs unexpectedly, Jiangsu Zhongtian 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 Zhongtian will offset losses from the drop in Jiangsu Zhongtian's long position.| Dalian Thermal vs. Industrial and Commercial | Dalian Thermal vs. Agricultural Bank of | Dalian Thermal vs. China Construction Bank | Dalian Thermal vs. Bank of China |
| Jiangsu Zhongtian vs. Kweichow Moutai Co | Jiangsu Zhongtian vs. Contemporary Amperex Technology | Jiangsu Zhongtian vs. G bits Network Technology | Jiangsu Zhongtian vs. BYD Co Ltd |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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