Correlation Between Jiangsu Xinri and Danhua Chemical
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By analyzing existing cross correlation between Jiangsu Xinri E Vehicle and Danhua Chemical Technology, you can compare the effects of market volatilities on Jiangsu Xinri and Danhua Chemical 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 Xinri with a short position of Danhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Xinri and Danhua Chemical.
Diversification Opportunities for Jiangsu Xinri and Danhua Chemical
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangsu and Danhua is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Xinri E Vehicle and Danhua Chemical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danhua Chemical Tech and Jiangsu Xinri 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 Xinri E Vehicle are associated (or correlated) with Danhua Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danhua Chemical Tech has no effect on the direction of Jiangsu Xinri i.e., Jiangsu Xinri and Danhua Chemical go up and down completely randomly.
Pair Corralation between Jiangsu Xinri and Danhua Chemical
Assuming the 90 days trading horizon Jiangsu Xinri E Vehicle is expected to under-perform the Danhua Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Xinri E Vehicle is 1.21 times less risky than Danhua Chemical. The stock trades about 0.0 of its potential returns per unit of risk. The Danhua Chemical Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 314.00 in Danhua Chemical Technology on September 14, 2024 and sell it today you would earn a total of 32.00 from holding Danhua Chemical Technology or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Jiangsu Xinri E Vehicle vs. Danhua Chemical Technology
Performance |
| Timeline |
| Jiangsu Xinri E |
| Danhua Chemical Tech |
Jiangsu Xinri and Danhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Xinri and Danhua Chemical
The main advantage of trading using opposite Jiangsu Xinri and Danhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Xinri position performs unexpectedly, Danhua Chemical 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 Danhua Chemical will offset losses from the drop in Danhua Chemical's long position.| Jiangsu Xinri vs. Chengdu Xinzhu RoadBridge | Jiangsu Xinri vs. Hubeiyichang Transportation Group | Jiangsu Xinri vs. Guizhou BroadcastingTV Info | Jiangsu Xinri vs. Postal Savings Bank |
| Danhua Chemical vs. Jiahe Foods Industry | Danhua Chemical vs. Zhejiang Kingland Pipeline | Danhua Chemical vs. Haima Automobile Group | Danhua Chemical vs. Jiangsu Xinri E Vehicle |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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