Correlation Between Jiangsu Yueda and Sinosteel Luonai
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By analyzing existing cross correlation between Jiangsu Yueda Investment and Sinosteel Luonai Materials, you can compare the effects of market volatilities on Jiangsu Yueda and Sinosteel Luonai 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 Jiangsu Yueda with a short position of Sinosteel Luonai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Yueda and Sinosteel Luonai.
Diversification Opportunities for Jiangsu Yueda and Sinosteel Luonai
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Sinosteel is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Yueda Investment and Sinosteel Luonai Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinosteel Luonai Mat and Jiangsu Yueda 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 Jiangsu Yueda Investment are associated (or correlated) with Sinosteel Luonai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinosteel Luonai Mat has no effect on the direction of Jiangsu Yueda i.e., Jiangsu Yueda and Sinosteel Luonai go up and down completely randomly.
Pair Corralation between Jiangsu Yueda and Sinosteel Luonai
Assuming the 90 days trading horizon Jiangsu Yueda Investment is expected to generate 1.51 times more return on investment than Sinosteel Luonai. However, Jiangsu Yueda is 1.51 times more volatile than Sinosteel Luonai Materials. It trades about -0.28 of its potential returns per unit of risk. Sinosteel Luonai Materials is currently generating about -0.54 per unit of risk. If you would invest 488.00 in Jiangsu Yueda Investment on October 14, 2024 and sell it today you would lose (67.00) from holding Jiangsu Yueda Investment or give up 13.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Yueda Investment vs. Sinosteel Luonai Materials
Performance |
| Timeline |
| Jiangsu Yueda Investment |
| Sinosteel Luonai Mat |
Jiangsu Yueda and Sinosteel Luonai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Yueda and Sinosteel Luonai
The main advantage of trading using opposite Jiangsu Yueda and Sinosteel Luonai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Yueda position performs unexpectedly, Sinosteel Luonai 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 Sinosteel Luonai will offset losses from the drop in Sinosteel Luonai's long position.| Jiangsu Yueda vs. Beijing Baolande Software | Jiangsu Yueda vs. Ligao Foods CoLtd | Jiangsu Yueda vs. Bingo Software Co | Jiangsu Yueda vs. Bohai Leasing Co |
| Sinosteel Luonai vs. Jiangsu Yueda Investment | Sinosteel Luonai vs. Hubei Geoway Investment | Sinosteel Luonai vs. StarPower Semiconductor | Sinosteel Luonai vs. Harbin Hatou Investment |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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