Correlation Between Jiangsu Broadcasting and Zhongshan Broad
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By analyzing existing cross correlation between Jiangsu Broadcasting Cable and Zhongshan Broad Ocean Motor, you can compare the effects of market volatilities on Jiangsu Broadcasting and Zhongshan Broad 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 Broadcasting with a short position of Zhongshan Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Broadcasting and Zhongshan Broad.
Diversification Opportunities for Jiangsu Broadcasting and Zhongshan Broad
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangsu and Zhongshan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Broadcasting Cable and Zhongshan Broad Ocean Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Broad Ocean and Jiangsu Broadcasting 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 Broadcasting Cable are associated (or correlated) with Zhongshan Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Broad Ocean has no effect on the direction of Jiangsu Broadcasting i.e., Jiangsu Broadcasting and Zhongshan Broad go up and down completely randomly.
Pair Corralation between Jiangsu Broadcasting and Zhongshan Broad
Assuming the 90 days trading horizon Jiangsu Broadcasting Cable is expected to generate 1.28 times more return on investment than Zhongshan Broad. However, Jiangsu Broadcasting is 1.28 times more volatile than Zhongshan Broad Ocean Motor. It trades about 0.18 of its potential returns per unit of risk. Zhongshan Broad Ocean Motor is currently generating about -0.13 per unit of risk. If you would invest 335.00 in Jiangsu Broadcasting Cable on September 3, 2024 and sell it today you would earn a total of 23.00 from holding Jiangsu Broadcasting Cable or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Broadcasting Cable vs. Zhongshan Broad Ocean Motor
Performance |
| Timeline |
| Jiangsu Broadcasting |
| Zhongshan Broad Ocean |
Jiangsu Broadcasting and Zhongshan Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Broadcasting and Zhongshan Broad
The main advantage of trading using opposite Jiangsu Broadcasting and Zhongshan Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Broadcasting position performs unexpectedly, Zhongshan Broad 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 Zhongshan Broad will offset losses from the drop in Zhongshan Broad's long position.The idea behind Jiangsu Broadcasting Cable and Zhongshan Broad Ocean Motor 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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