Correlation Between Jiangsu Pacific and Sinocat Environmental
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By analyzing existing cross correlation between Jiangsu Pacific Quartz and Sinocat Environmental Technology, you can compare the effects of market volatilities on Jiangsu Pacific and Sinocat Environmental 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 Sinocat Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Pacific and Sinocat Environmental.
Diversification Opportunities for Jiangsu Pacific and Sinocat Environmental
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jiangsu and Sinocat is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Pacific Quartz and Sinocat Environmental Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinocat Environmental 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 Sinocat Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinocat Environmental has no effect on the direction of Jiangsu Pacific i.e., Jiangsu Pacific and Sinocat Environmental go up and down completely randomly.
Pair Corralation between Jiangsu Pacific and Sinocat Environmental
Assuming the 90 days trading horizon Jiangsu Pacific Quartz is expected to generate 0.86 times more return on investment than Sinocat Environmental. However, Jiangsu Pacific Quartz is 1.16 times less risky than Sinocat Environmental. It trades about -0.01 of its potential returns per unit of risk. Sinocat Environmental Technology is currently generating about -0.01 per unit of risk. If you would invest 2,652 in Jiangsu Pacific Quartz on November 7, 2024 and sell it today you would lose (19.00) from holding Jiangsu Pacific Quartz or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Pacific Quartz vs. Sinocat Environmental Technolo
Performance |
| Timeline |
| Jiangsu Pacific Quartz |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sinocat Environmental |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Jiangsu Pacific and Sinocat Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Pacific and Sinocat Environmental
The main advantage of trading using opposite Jiangsu Pacific and Sinocat Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Pacific position performs unexpectedly, Sinocat Environmental 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 Sinocat Environmental will offset losses from the drop in Sinocat Environmental's long position.The idea behind Jiangsu Pacific Quartz and Sinocat Environmental Technology 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.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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