Correlation Between Western Superconducting and Jiangxi Hengda
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By analyzing existing cross correlation between Western Superconducting Tech and Jiangxi Hengda Hi Tech, you can compare the effects of market volatilities on Western Superconducting and Jiangxi Hengda 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 Western Superconducting with a short position of Jiangxi Hengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Superconducting and Jiangxi Hengda.
Diversification Opportunities for Western Superconducting and Jiangxi Hengda
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Jiangxi is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Western Superconducting Tech and Jiangxi Hengda Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Hengda Hi and Western Superconducting 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 Western Superconducting Tech are associated (or correlated) with Jiangxi Hengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Hengda Hi has no effect on the direction of Western Superconducting i.e., Western Superconducting and Jiangxi Hengda go up and down completely randomly.
Pair Corralation between Western Superconducting and Jiangxi Hengda
Assuming the 90 days trading horizon Western Superconducting Tech is expected to under-perform the Jiangxi Hengda. But the stock apears to be less risky and, when comparing its historical volatility, Western Superconducting Tech is 1.3 times less risky than Jiangxi Hengda. The stock trades about -0.02 of its potential returns per unit of risk. The Jiangxi Hengda Hi Tech is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 650.00 in Jiangxi Hengda Hi Tech on August 24, 2024 and sell it today you would lose (115.00) from holding Jiangxi Hengda Hi Tech or give up 17.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Superconducting Tech vs. Jiangxi Hengda Hi Tech
Performance |
| Timeline |
| Western Superconducting |
| Jiangxi Hengda Hi |
Western Superconducting and Jiangxi Hengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Superconducting and Jiangxi Hengda
The main advantage of trading using opposite Western Superconducting and Jiangxi Hengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Superconducting position performs unexpectedly, Jiangxi Hengda 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 Hengda will offset losses from the drop in Jiangxi Hengda's long position.The idea behind Western Superconducting Tech and Jiangxi Hengda Hi Tech 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.
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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