Correlation Between Xiamen ITG and Changsha Jingjia
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By analyzing existing cross correlation between Xiamen ITG Group and Changsha Jingjia Microelectronics, you can compare the effects of market volatilities on Xiamen ITG and Changsha Jingjia 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 Xiamen ITG with a short position of Changsha Jingjia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen ITG and Changsha Jingjia.
Diversification Opportunities for Xiamen ITG and Changsha Jingjia
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xiamen and Changsha is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen ITG Group and Changsha Jingjia Microelectron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changsha Jingjia Mic and Xiamen ITG 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 Xiamen ITG Group are associated (or correlated) with Changsha Jingjia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changsha Jingjia Mic has no effect on the direction of Xiamen ITG i.e., Xiamen ITG and Changsha Jingjia go up and down completely randomly.
Pair Corralation between Xiamen ITG and Changsha Jingjia
Assuming the 90 days trading horizon Xiamen ITG is expected to generate 24.3 times less return on investment than Changsha Jingjia. But when comparing it to its historical volatility, Xiamen ITG Group is 3.61 times less risky than Changsha Jingjia. It trades about 0.04 of its potential returns per unit of risk. Changsha Jingjia Microelectronics is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 8,122 in Changsha Jingjia Microelectronics on September 27, 2024 and sell it today you would earn a total of 2,278 from holding Changsha Jingjia Microelectronics or generate 28.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xiamen ITG Group vs. Changsha Jingjia Microelectron
Performance |
| Timeline |
| Xiamen ITG Group |
| Changsha Jingjia Mic |
Xiamen ITG and Changsha Jingjia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xiamen ITG and Changsha Jingjia
The main advantage of trading using opposite Xiamen ITG and Changsha Jingjia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen ITG position performs unexpectedly, Changsha Jingjia 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 Changsha Jingjia will offset losses from the drop in Changsha Jingjia's long position.| Xiamen ITG vs. China Life Insurance | Xiamen ITG vs. Cinda Securities Co | Xiamen ITG vs. Piotech Inc A | Xiamen ITG vs. Dongxing Sec Co |
| Changsha Jingjia vs. Ming Yang Smart | Changsha Jingjia vs. 159681 | Changsha Jingjia vs. 159005 | Changsha Jingjia vs. Loctek Ergonomic Technology |
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