Correlation Between Zhejiang Yongjin and Jiangxi Ganfeng
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By analyzing existing cross correlation between Zhejiang Yongjin Metal and Jiangxi Ganfeng Lithium, you can compare the effects of market volatilities on Zhejiang Yongjin 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 Zhejiang Yongjin with a short position of Jiangxi Ganfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yongjin and Jiangxi Ganfeng.
Diversification Opportunities for Zhejiang Yongjin and Jiangxi Ganfeng
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and Jiangxi is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yongjin Metal 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 Zhejiang Yongjin 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 Zhejiang Yongjin Metal 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 Zhejiang Yongjin i.e., Zhejiang Yongjin and Jiangxi Ganfeng go up and down completely randomly.
Pair Corralation between Zhejiang Yongjin and Jiangxi Ganfeng
Assuming the 90 days trading horizon Zhejiang Yongjin is expected to generate 14.85 times less return on investment than Jiangxi Ganfeng. But when comparing it to its historical volatility, Zhejiang Yongjin Metal is 2.63 times less risky than Jiangxi Ganfeng. It trades about 0.04 of its potential returns per unit of risk. Jiangxi Ganfeng Lithium is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,398 in Jiangxi Ganfeng Lithium on September 1, 2024 and sell it today you would earn a total of 807.00 from holding Jiangxi Ganfeng Lithium or generate 23.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yongjin Metal vs. Jiangxi Ganfeng Lithium
Performance |
| Timeline |
| Zhejiang Yongjin Metal |
| Jiangxi Ganfeng Lithium |
Zhejiang Yongjin and Jiangxi Ganfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yongjin and Jiangxi Ganfeng
The main advantage of trading using opposite Zhejiang Yongjin and Jiangxi Ganfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yongjin 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.| Zhejiang Yongjin vs. Jiangsu GDK Biotechnology | Zhejiang Yongjin vs. Southern PublishingMedia Co | Zhejiang Yongjin vs. Sunny Loan Top | Zhejiang Yongjin vs. Shanghai Metersbonwe FashionAccessories |
| Jiangxi Ganfeng vs. China Minmetals Rare | Jiangxi Ganfeng vs. Shenzhen Kexin Communication | Jiangxi Ganfeng vs. Pengxin International Mining | Jiangxi Ganfeng vs. Guangdong Shenglu Telecommunication |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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