Correlation Between Jiangsu Financial and Guangzhou Zhujiang
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By analyzing existing cross correlation between Jiangsu Financial Leasing and Guangzhou Zhujiang Brewery, you can compare the effects of market volatilities on Jiangsu Financial and Guangzhou Zhujiang 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 Guangzhou Zhujiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Financial and Guangzhou Zhujiang.
Diversification Opportunities for Jiangsu Financial and Guangzhou Zhujiang
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Guangzhou is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Financial Leasing and Guangzhou Zhujiang Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Zhujiang 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 Guangzhou Zhujiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Zhujiang has no effect on the direction of Jiangsu Financial i.e., Jiangsu Financial and Guangzhou Zhujiang go up and down completely randomly.
Pair Corralation between Jiangsu Financial and Guangzhou Zhujiang
Assuming the 90 days trading horizon Jiangsu Financial Leasing is expected to under-perform the Guangzhou Zhujiang. In addition to that, Jiangsu Financial is 1.06 times more volatile than Guangzhou Zhujiang Brewery. It trades about -0.08 of its total potential returns per unit of risk. Guangzhou Zhujiang Brewery is currently generating about -0.01 per unit of volatility. If you would invest 910.00 in Guangzhou Zhujiang Brewery on September 12, 2024 and sell it today you would lose (4.00) from holding Guangzhou Zhujiang Brewery or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Financial Leasing vs. Guangzhou Zhujiang Brewery
Performance |
| Timeline |
| Jiangsu Financial Leasing |
| Guangzhou Zhujiang |
Jiangsu Financial and Guangzhou Zhujiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Financial and Guangzhou Zhujiang
The main advantage of trading using opposite Jiangsu Financial and Guangzhou Zhujiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Financial position performs unexpectedly, Guangzhou Zhujiang 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 Guangzhou Zhujiang will offset losses from the drop in Guangzhou Zhujiang's long position.| Jiangsu Financial vs. China Petroleum Chemical | Jiangsu Financial vs. PetroChina Co Ltd | Jiangsu Financial vs. China Mobile Limited | Jiangsu Financial vs. Industrial and Commercial |
| Guangzhou Zhujiang vs. China Petroleum Chemical | Guangzhou Zhujiang vs. PetroChina Co Ltd | Guangzhou Zhujiang vs. China State Construction | Guangzhou Zhujiang vs. China Railway Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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