Correlation Between Dalian Thermal and Yunnan Jianzhijia
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By analyzing existing cross correlation between Dalian Thermal Power and Yunnan Jianzhijia Health Chain, you can compare the effects of market volatilities on Dalian Thermal and Yunnan Jianzhijia 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 Yunnan Jianzhijia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Yunnan Jianzhijia.
Diversification Opportunities for Dalian Thermal and Yunnan Jianzhijia
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dalian and Yunnan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Yunnan Jianzhijia Health Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Jianzhijia 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 Yunnan Jianzhijia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Jianzhijia has no effect on the direction of Dalian Thermal i.e., Dalian Thermal and Yunnan Jianzhijia go up and down completely randomly.
Pair Corralation between Dalian Thermal and Yunnan Jianzhijia
Assuming the 90 days trading horizon Dalian Thermal Power is expected to under-perform the Yunnan Jianzhijia. But the stock apears to be less risky and, when comparing its historical volatility, Dalian Thermal Power is 1.17 times less risky than Yunnan Jianzhijia. The stock trades about -0.01 of its potential returns per unit of risk. The Yunnan Jianzhijia Health Chain is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,119 in Yunnan Jianzhijia Health Chain on September 1, 2024 and sell it today you would earn a total of 513.00 from holding Yunnan Jianzhijia Health Chain or generate 24.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalian Thermal Power vs. Yunnan Jianzhijia Health Chain
Performance |
| Timeline |
| Dalian Thermal Power |
| Yunnan Jianzhijia |
Dalian Thermal and Yunnan Jianzhijia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Yunnan Jianzhijia
The main advantage of trading using opposite Dalian Thermal and Yunnan Jianzhijia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal position performs unexpectedly, Yunnan Jianzhijia 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 Yunnan Jianzhijia will offset losses from the drop in Yunnan Jianzhijia's long position.| Dalian Thermal vs. Lutian Machinery Co | Dalian Thermal vs. China Longyuan Power | Dalian Thermal vs. PetroChina Co Ltd | Dalian Thermal vs. Bank of China |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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