Correlation Between Southern PublishingMedia and Jiangxi Lianchuang
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By analyzing existing cross correlation between Southern PublishingMedia Co and Jiangxi Lianchuang Opto electronic, you can compare the effects of market volatilities on Southern PublishingMedia and Jiangxi Lianchuang 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 Southern PublishingMedia with a short position of Jiangxi Lianchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern PublishingMedia and Jiangxi Lianchuang.
Diversification Opportunities for Southern PublishingMedia and Jiangxi Lianchuang
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Southern and Jiangxi is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Southern PublishingMedia Co and Jiangxi Lianchuang Opto electr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Lianchuang Opto and Southern PublishingMedia 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 Southern PublishingMedia Co are associated (or correlated) with Jiangxi Lianchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Lianchuang Opto has no effect on the direction of Southern PublishingMedia i.e., Southern PublishingMedia and Jiangxi Lianchuang go up and down completely randomly.
Pair Corralation between Southern PublishingMedia and Jiangxi Lianchuang
Assuming the 90 days trading horizon Southern PublishingMedia Co is expected to under-perform the Jiangxi Lianchuang. But the stock apears to be less risky and, when comparing its historical volatility, Southern PublishingMedia Co is 1.67 times less risky than Jiangxi Lianchuang. The stock trades about -0.23 of its potential returns per unit of risk. The Jiangxi Lianchuang Opto electronic is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 4,913 in Jiangxi Lianchuang Opto electronic on October 14, 2024 and sell it today you would lose (453.00) from holding Jiangxi Lianchuang Opto electronic or give up 9.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern PublishingMedia Co vs. Jiangxi Lianchuang Opto electr
Performance |
| Timeline |
| Southern PublishingMedia |
| Jiangxi Lianchuang Opto |
Southern PublishingMedia and Jiangxi Lianchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern PublishingMedia and Jiangxi Lianchuang
The main advantage of trading using opposite Southern PublishingMedia and Jiangxi Lianchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern PublishingMedia position performs unexpectedly, Jiangxi Lianchuang 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 Jiangxi Lianchuang will offset losses from the drop in Jiangxi Lianchuang's long position.The idea behind Southern PublishingMedia Co and Jiangxi Lianchuang Opto electronic 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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