Correlation Between Jiangsu Pacific and Shanghai Laimu
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By analyzing existing cross correlation between Jiangsu Pacific Quartz and Shanghai Laimu Electronics, you can compare the effects of market volatilities on Jiangsu Pacific and Shanghai Laimu 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 Pacific with a short position of Shanghai Laimu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Pacific and Shanghai Laimu.
Diversification Opportunities for Jiangsu Pacific and Shanghai Laimu
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Shanghai is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Pacific Quartz and Shanghai Laimu Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Laimu Elect and Jiangsu Pacific 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 Pacific Quartz are associated (or correlated) with Shanghai Laimu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Laimu Elect has no effect on the direction of Jiangsu Pacific i.e., Jiangsu Pacific and Shanghai Laimu go up and down completely randomly.
Pair Corralation between Jiangsu Pacific and Shanghai Laimu
Assuming the 90 days trading horizon Jiangsu Pacific Quartz is expected to under-perform the Shanghai Laimu. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Pacific Quartz is 1.32 times less risky than Shanghai Laimu. The stock trades about -0.18 of its potential returns per unit of risk. The Shanghai Laimu Electronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 810.00 in Shanghai Laimu Electronics on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Shanghai Laimu Electronics or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Pacific Quartz vs. Shanghai Laimu Electronics
Performance |
| Timeline |
| Jiangsu Pacific Quartz |
| Shanghai Laimu Elect |
Jiangsu Pacific and Shanghai Laimu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Pacific and Shanghai Laimu
The main advantage of trading using opposite Jiangsu Pacific and Shanghai Laimu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Pacific position performs unexpectedly, Shanghai Laimu 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 Shanghai Laimu will offset losses from the drop in Shanghai Laimu's long position.| Jiangsu Pacific vs. Fujian Longzhou Transportation | Jiangsu Pacific vs. Fujian Oriental Silver | Jiangsu Pacific vs. Xinjiang Baodi Mining | Jiangsu Pacific vs. Jiangxi Naipu Mining |
| Shanghai Laimu vs. Shandong Iron and | Shanghai Laimu vs. Yunnan Jianzhijia Health Chain | Shanghai Laimu vs. Sanbo Hospital Management | Shanghai Laimu vs. Sinosteel Engineering and |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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