Correlation Between China State and Jizhong Energy
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By analyzing existing cross correlation between China State Construction and Jizhong Energy Resources, you can compare the effects of market volatilities on China State and Jizhong Energy 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 China State with a short position of Jizhong Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Jizhong Energy.
Diversification Opportunities for China State and Jizhong Energy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Jizhong is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Jizhong Energy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jizhong Energy Resources and China State 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 China State Construction are associated (or correlated) with Jizhong Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jizhong Energy Resources has no effect on the direction of China State i.e., China State and Jizhong Energy go up and down completely randomly.
Pair Corralation between China State and Jizhong Energy
Assuming the 90 days trading horizon China State is expected to generate 4.01 times less return on investment than Jizhong Energy. In addition to that, China State is 1.06 times more volatile than Jizhong Energy Resources. It trades about 0.0 of its total potential returns per unit of risk. Jizhong Energy Resources is currently generating about 0.02 per unit of volatility. If you would invest 545.00 in Jizhong Energy Resources on November 27, 2024 and sell it today you would earn a total of 38.00 from holding Jizhong Energy Resources or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Jizhong Energy Resources
Performance |
| Timeline |
| China State Construction |
| Jizhong Energy Resources |
China State and Jizhong Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Jizhong Energy
The main advantage of trading using opposite China State and Jizhong Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, Jizhong Energy 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 Jizhong Energy will offset losses from the drop in Jizhong Energy's long position.| China State vs. TianJin 712 Communication | China State vs. INKON Life Technology | China State vs. Juneyao Airlines | China State vs. Elec Tech International Co |
| Jizhong Energy vs. Jiangsu Yueda Investment | Jizhong Energy vs. Zoje Resources Investment | Jizhong Energy vs. Shaanxi Broadcast TV | Jizhong Energy vs. Chengdu Xingrong Investment |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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