Correlation Between Jiangsu Financial and Beijing Yanjing
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By analyzing existing cross correlation between Jiangsu Financial Leasing and Beijing Yanjing Brewery, you can compare the effects of market volatilities on Jiangsu Financial and Beijing Yanjing 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 Financial with a short position of Beijing Yanjing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Financial and Beijing Yanjing.
Diversification Opportunities for Jiangsu Financial and Beijing Yanjing
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangsu and Beijing is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Financial Leasing and Beijing Yanjing Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Yanjing Brewery and Jiangsu Financial 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 Financial Leasing are associated (or correlated) with Beijing Yanjing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Yanjing Brewery has no effect on the direction of Jiangsu Financial i.e., Jiangsu Financial and Beijing Yanjing go up and down completely randomly.
Pair Corralation between Jiangsu Financial and Beijing Yanjing
Assuming the 90 days trading horizon Jiangsu Financial Leasing is expected to under-perform the Beijing Yanjing. In addition to that, Jiangsu Financial is 1.06 times more volatile than Beijing Yanjing Brewery. It trades about -0.03 of its total potential returns per unit of risk. Beijing Yanjing Brewery is currently generating about 0.06 per unit of volatility. If you would invest 1,021 in Beijing Yanjing Brewery on September 4, 2024 and sell it today you would earn a total of 19.00 from holding Beijing Yanjing Brewery or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Financial Leasing vs. Beijing Yanjing Brewery
Performance |
| Timeline |
| Jiangsu Financial Leasing |
| Beijing Yanjing Brewery |
Jiangsu Financial and Beijing Yanjing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Financial and Beijing Yanjing
The main advantage of trading using opposite Jiangsu Financial and Beijing Yanjing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Financial position performs unexpectedly, Beijing Yanjing 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 Beijing Yanjing will offset losses from the drop in Beijing Yanjing's long position.| Jiangsu Financial vs. China Petroleum Chemical | Jiangsu Financial vs. PetroChina Co Ltd | Jiangsu Financial vs. China State Construction | Jiangsu Financial vs. China Railway Group |
| Beijing Yanjing vs. Jiangsu Xinri E Vehicle | Beijing Yanjing vs. Offshore Oil Engineering | Beijing Yanjing vs. Beijing Mainstreets Investment | Beijing Yanjing vs. CIMC Vehicles Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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