Correlation Between Changchun Engley and Jiangsu GDK
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By analyzing existing cross correlation between Changchun Engley Automobile and Jiangsu GDK Biotechnology, you can compare the effects of market volatilities on Changchun Engley and Jiangsu GDK 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 Changchun Engley with a short position of Jiangsu GDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Engley and Jiangsu GDK.
Diversification Opportunities for Changchun Engley and Jiangsu GDK
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Jiangsu is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Engley Automobile and Jiangsu GDK Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu GDK Biotechnology and Changchun Engley 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 Changchun Engley Automobile are associated (or correlated) with Jiangsu GDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu GDK Biotechnology has no effect on the direction of Changchun Engley i.e., Changchun Engley and Jiangsu GDK go up and down completely randomly.
Pair Corralation between Changchun Engley and Jiangsu GDK
Assuming the 90 days trading horizon Changchun Engley Automobile is expected to generate 0.75 times more return on investment than Jiangsu GDK. However, Changchun Engley Automobile is 1.33 times less risky than Jiangsu GDK. It trades about -0.05 of its potential returns per unit of risk. Jiangsu GDK Biotechnology is currently generating about -0.05 per unit of risk. If you would invest 640.00 in Changchun Engley Automobile on September 2, 2024 and sell it today you would lose (229.00) from holding Changchun Engley Automobile or give up 35.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Engley Automobile vs. Jiangsu GDK Biotechnology
Performance |
| Timeline |
| Changchun Engley Aut |
| Jiangsu GDK Biotechnology |
Changchun Engley and Jiangsu GDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Engley and Jiangsu GDK
The main advantage of trading using opposite Changchun Engley and Jiangsu GDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Engley position performs unexpectedly, Jiangsu GDK 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 Jiangsu GDK will offset losses from the drop in Jiangsu GDK's long position.| Changchun Engley vs. BYD Co Ltd | Changchun Engley vs. China Mobile Limited | Changchun Engley vs. Agricultural Bank of | Changchun Engley vs. Industrial and Commercial |
| Jiangsu GDK vs. PetroChina Co Ltd | Jiangsu GDK vs. China Mobile Limited | Jiangsu GDK vs. CNOOC Limited | Jiangsu GDK vs. Ping An Insurance |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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