Correlation Between Industrial and Changjiang Jinggong

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Can any of the company-specific risk be diversified away by investing in both Industrial and Changjiang Jinggong at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Industrial and Changjiang Jinggong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial and Commercial and Changjiang Jinggong Steel, you can compare the effects of market volatilities on Industrial 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 Industrial with a short position of Changjiang Jinggong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Changjiang Jinggong.

Diversification Opportunities for Industrial and Changjiang Jinggong

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Industrial and Changjiang is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial 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 Industrial 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 Industrial and Commercial 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 Industrial i.e., Industrial and Changjiang Jinggong go up and down completely randomly.

Pair Corralation between Industrial and Changjiang Jinggong

Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.78 times more return on investment than Changjiang Jinggong. However, Industrial and Commercial is 1.28 times less risky than Changjiang Jinggong. It trades about 0.09 of its potential returns per unit of risk. Changjiang Jinggong Steel is currently generating about -0.04 per unit of risk. If you would invest  405.00  in Industrial and Commercial on October 14, 2024 and sell it today you would earn a total of  262.00  from holding Industrial and Commercial or generate 64.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Industrial and Commercial  vs.  Changjiang Jinggong Steel

 Performance 
       Timeline  
Industrial and Commercial 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Industrial and Commercial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Changjiang Jinggong Steel 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Changjiang Jinggong Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Changjiang Jinggong is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Industrial and Changjiang Jinggong Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Industrial and Changjiang Jinggong

The main advantage of trading using opposite Industrial and Changjiang Jinggong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial 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.
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The idea behind Industrial and Commercial and Changjiang Jinggong Steel 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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