Correlation Between Changjiang Publishing and Xiamen Jihong
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By analyzing existing cross correlation between Changjiang Publishing Media and Xiamen Jihong Package, you can compare the effects of market volatilities on Changjiang Publishing and Xiamen Jihong 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 Changjiang Publishing with a short position of Xiamen Jihong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Publishing and Xiamen Jihong.
Diversification Opportunities for Changjiang Publishing and Xiamen Jihong
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Changjiang and Xiamen is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Publishing Media and Xiamen Jihong Package in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Jihong Package and Changjiang Publishing 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 Changjiang Publishing Media are associated (or correlated) with Xiamen Jihong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Jihong Package has no effect on the direction of Changjiang Publishing i.e., Changjiang Publishing and Xiamen Jihong go up and down completely randomly.
Pair Corralation between Changjiang Publishing and Xiamen Jihong
Assuming the 90 days trading horizon Changjiang Publishing Media is expected to generate 0.51 times more return on investment than Xiamen Jihong. However, Changjiang Publishing Media is 1.96 times less risky than Xiamen Jihong. It trades about -0.16 of its potential returns per unit of risk. Xiamen Jihong Package is currently generating about -0.32 per unit of risk. If you would invest 902.00 in Changjiang Publishing Media on October 15, 2024 and sell it today you would lose (55.00) from holding Changjiang Publishing Media or give up 6.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changjiang Publishing Media vs. Xiamen Jihong Package
Performance |
| Timeline |
| Changjiang Publishing |
| Xiamen Jihong Package |
Changjiang Publishing and Xiamen Jihong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changjiang Publishing and Xiamen Jihong
The main advantage of trading using opposite Changjiang Publishing and Xiamen Jihong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Publishing position performs unexpectedly, Xiamen Jihong 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 Xiamen Jihong will offset losses from the drop in Xiamen Jihong's long position.The idea behind Changjiang Publishing Media and Xiamen Jihong Package 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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