Correlation Between Jiangsu Seagull and Guangdong Liantai
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By analyzing existing cross correlation between Jiangsu Seagull Cooling and Guangdong Liantai Environmental, you can compare the effects of market volatilities on Jiangsu Seagull and Guangdong Liantai 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 Jiangsu Seagull with a short position of Guangdong Liantai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Seagull and Guangdong Liantai.
Diversification Opportunities for Jiangsu Seagull and Guangdong Liantai
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Guangdong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Seagull Cooling and Guangdong Liantai Environmenta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Liantai and Jiangsu Seagull 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 Jiangsu Seagull Cooling are associated (or correlated) with Guangdong Liantai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Liantai has no effect on the direction of Jiangsu Seagull i.e., Jiangsu Seagull and Guangdong Liantai go up and down completely randomly.
Pair Corralation between Jiangsu Seagull and Guangdong Liantai
Assuming the 90 days trading horizon Jiangsu Seagull Cooling is expected to under-perform the Guangdong Liantai. In addition to that, Jiangsu Seagull is 1.35 times more volatile than Guangdong Liantai Environmental. It trades about -0.01 of its total potential returns per unit of risk. Guangdong Liantai Environmental is currently generating about 0.08 per unit of volatility. If you would invest 353.00 in Guangdong Liantai Environmental on August 31, 2024 and sell it today you would earn a total of 77.00 from holding Guangdong Liantai Environmental or generate 21.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Seagull Cooling vs. Guangdong Liantai Environmenta
Performance |
| Timeline |
| Jiangsu Seagull Cooling |
| Guangdong Liantai |
Jiangsu Seagull and Guangdong Liantai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Seagull and Guangdong Liantai
The main advantage of trading using opposite Jiangsu Seagull and Guangdong Liantai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Seagull position performs unexpectedly, Guangdong Liantai 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 Guangdong Liantai will offset losses from the drop in Guangdong Liantai's long position.| Jiangsu Seagull vs. Muyuan Foodstuff Co | Jiangsu Seagull vs. Tonghua Grape Wine | Jiangsu Seagull vs. Shenzhen Kexin Communication | Jiangsu Seagull vs. Wuhan Yangtze Communication |
| Guangdong Liantai vs. Cultural Investment Holdings | Guangdong Liantai vs. Gome Telecom Equipment | Guangdong Liantai vs. Bus Online Co | Guangdong Liantai vs. Holitech Technology Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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