Correlation Between Sichuan Hebang and Jiangxi Ganfeng
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By analyzing existing cross correlation between Sichuan Hebang Biotechnology and Jiangxi Ganfeng Lithium, you can compare the effects of market volatilities on Sichuan Hebang and Jiangxi Ganfeng 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 Sichuan Hebang with a short position of Jiangxi Ganfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Hebang and Jiangxi Ganfeng.
Diversification Opportunities for Sichuan Hebang and Jiangxi Ganfeng
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Jiangxi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Hebang Biotechnology and Jiangxi Ganfeng Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Ganfeng Lithium and Sichuan Hebang 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 Sichuan Hebang Biotechnology are associated (or correlated) with Jiangxi Ganfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Ganfeng Lithium has no effect on the direction of Sichuan Hebang i.e., Sichuan Hebang and Jiangxi Ganfeng go up and down completely randomly.
Pair Corralation between Sichuan Hebang and Jiangxi Ganfeng
Assuming the 90 days trading horizon Sichuan Hebang Biotechnology is expected to under-perform the Jiangxi Ganfeng. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Hebang Biotechnology is 1.65 times less risky than Jiangxi Ganfeng. The stock trades about -0.01 of its potential returns per unit of risk. The Jiangxi Ganfeng Lithium is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,094 in Jiangxi Ganfeng Lithium on September 3, 2024 and sell it today you would earn a total of 113.00 from holding Jiangxi Ganfeng Lithium or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Hebang Biotechnology vs. Jiangxi Ganfeng Lithium
Performance |
| Timeline |
| Sichuan Hebang Biote |
| Jiangxi Ganfeng Lithium |
Sichuan Hebang and Jiangxi Ganfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Hebang and Jiangxi Ganfeng
The main advantage of trading using opposite Sichuan Hebang and Jiangxi Ganfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Hebang position performs unexpectedly, Jiangxi Ganfeng 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 Ganfeng will offset losses from the drop in Jiangxi Ganfeng's long position.| Sichuan Hebang vs. Zijin Mining Group | Sichuan Hebang vs. Baoshan Iron Steel | Sichuan Hebang vs. Hoshine Silicon Ind |
| Jiangxi Ganfeng vs. Dymatic Chemicals | Jiangxi Ganfeng vs. Yingde Greatchem Chemicals | Jiangxi Ganfeng vs. Ningxia Younglight Chemicals | Jiangxi Ganfeng vs. Shandong Polymer Biochemicals |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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