Correlation Between Industrial and Jiangsu GDK
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By analyzing existing cross correlation between Industrial and Commercial and Jiangsu GDK Biotechnology, you can compare the effects of market volatilities on Industrial 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 Industrial with a short position of Jiangsu GDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Jiangsu GDK.
Diversification Opportunities for Industrial and Jiangsu GDK
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Industrial and Jiangsu is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial 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 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 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 Industrial i.e., Industrial and Jiangsu GDK go up and down completely randomly.
Pair Corralation between Industrial and Jiangsu GDK
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 0.36 times more return on investment than Jiangsu GDK. However, Industrial and Commercial is 2.79 times less risky than Jiangsu GDK. It trades about 0.24 of its potential returns per unit of risk. Jiangsu GDK Biotechnology is currently generating about -0.02 per unit of risk. If you would invest 600.00 in Industrial and Commercial on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Industrial and Commercial or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Jiangsu GDK Biotechnology
Performance |
| Timeline |
| Industrial and Commercial |
| Jiangsu GDK Biotechnology |
Industrial and Jiangsu GDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Jiangsu GDK
The main advantage of trading using opposite Industrial and Jiangsu GDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial 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.| Industrial vs. Pengxin International Mining | Industrial vs. Qilu Bank Co | Industrial vs. Tibet Huayu Mining | Industrial vs. Chengtun Mining Group |
| Jiangsu GDK vs. Industrial and Commercial | Jiangsu GDK vs. China Construction Bank | Jiangsu GDK vs. Bank of China | Jiangsu GDK vs. Agricultural Bank of |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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