Correlation Between New China and Changjiang Jinggong
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By analyzing existing cross correlation between New China Life and Changjiang Jinggong Steel, you can compare the effects of market volatilities on New China and Changjiang Jinggong 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 New China with a short position of Changjiang Jinggong. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and Changjiang Jinggong.
Diversification Opportunities for New China and Changjiang Jinggong
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Changjiang is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and Changjiang Jinggong Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changjiang Jinggong Steel and New China 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 New China Life are associated (or correlated) with Changjiang Jinggong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changjiang Jinggong Steel has no effect on the direction of New China i.e., New China and Changjiang Jinggong go up and down completely randomly.
Pair Corralation between New China and Changjiang Jinggong
Assuming the 90 days trading horizon New China Life is expected to generate 1.55 times more return on investment than Changjiang Jinggong. However, New China is 1.55 times more volatile than Changjiang Jinggong Steel. It trades about 0.05 of its potential returns per unit of risk. Changjiang Jinggong Steel is currently generating about -0.03 per unit of risk. If you would invest 2,978 in New China Life on August 30, 2024 and sell it today you would earn a total of 1,714 from holding New China Life or generate 57.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New China Life vs. Changjiang Jinggong Steel
Performance |
| Timeline |
| New China Life |
| Changjiang Jinggong Steel |
New China and Changjiang Jinggong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and Changjiang Jinggong
The main advantage of trading using opposite New China and Changjiang Jinggong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, Changjiang Jinggong 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 Changjiang Jinggong will offset losses from the drop in Changjiang Jinggong's long position.| New China vs. Eastroc Beverage Group | New China vs. Hangzhou Coco Healthcare | New China vs. Dazhong Transportation Group | New China vs. CICC Fund Management |
| Changjiang Jinggong vs. Lander Sports Development | Changjiang Jinggong vs. Shanghai CEO Environmental | Changjiang Jinggong vs. Cicc Fund Management | Changjiang Jinggong vs. Chengdu B ray Media |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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