Correlation Between Jiangsu Financial and Liuzhou Chemical
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By analyzing existing cross correlation between Jiangsu Financial Leasing and Liuzhou Chemical Industry, you can compare the effects of market volatilities on Jiangsu Financial and Liuzhou Chemical 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 Liuzhou Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Financial and Liuzhou Chemical.
Diversification Opportunities for Jiangsu Financial and Liuzhou Chemical
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Liuzhou is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Financial Leasing and Liuzhou Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liuzhou Chemical Industry 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 Liuzhou Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liuzhou Chemical Industry has no effect on the direction of Jiangsu Financial i.e., Jiangsu Financial and Liuzhou Chemical go up and down completely randomly.
Pair Corralation between Jiangsu Financial and Liuzhou Chemical
Assuming the 90 days trading horizon Jiangsu Financial is expected to generate 2.02 times less return on investment than Liuzhou Chemical. But when comparing it to its historical volatility, Jiangsu Financial Leasing is 1.41 times less risky than Liuzhou Chemical. It trades about 0.01 of its potential returns per unit of risk. Liuzhou Chemical Industry is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 282.00 in Liuzhou Chemical Industry on August 25, 2024 and sell it today you would earn a total of 5.00 from holding Liuzhou Chemical Industry or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Financial Leasing vs. Liuzhou Chemical Industry
Performance |
| Timeline |
| Jiangsu Financial Leasing |
| Liuzhou Chemical Industry |
Jiangsu Financial and Liuzhou Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Financial and Liuzhou Chemical
The main advantage of trading using opposite Jiangsu Financial and Liuzhou Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Financial position performs unexpectedly, Liuzhou Chemical 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 Liuzhou Chemical will offset losses from the drop in Liuzhou Chemical's long position.| Jiangsu Financial vs. Lonkey Industrial Co | Jiangsu Financial vs. Guangzhou Haozhi Industrial | Jiangsu Financial vs. Guangdong Jingyi Metal | Jiangsu Financial vs. Shenzhen Kexin Communication |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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