Correlation Between Suzhou Mingzhi and Jiangsu Financial
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By analyzing existing cross correlation between Suzhou Mingzhi Technology and Jiangsu Financial Leasing, you can compare the effects of market volatilities on Suzhou Mingzhi and Jiangsu Financial 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 Suzhou Mingzhi with a short position of Jiangsu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzhou Mingzhi and Jiangsu Financial.
Diversification Opportunities for Suzhou Mingzhi and Jiangsu Financial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Suzhou and Jiangsu is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Suzhou Mingzhi Technology and Jiangsu Financial Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Financial Leasing and Suzhou Mingzhi 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 Suzhou Mingzhi Technology are associated (or correlated) with Jiangsu Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Financial Leasing has no effect on the direction of Suzhou Mingzhi i.e., Suzhou Mingzhi and Jiangsu Financial go up and down completely randomly.
Pair Corralation between Suzhou Mingzhi and Jiangsu Financial
Assuming the 90 days trading horizon Suzhou Mingzhi Technology is expected to generate 1.82 times more return on investment than Jiangsu Financial. However, Suzhou Mingzhi is 1.82 times more volatile than Jiangsu Financial Leasing. It trades about 0.06 of its potential returns per unit of risk. Jiangsu Financial Leasing is currently generating about 0.03 per unit of risk. If you would invest 1,266 in Suzhou Mingzhi Technology on November 7, 2024 and sell it today you would earn a total of 533.00 from holding Suzhou Mingzhi Technology or generate 42.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzhou Mingzhi Technology vs. Jiangsu Financial Leasing
Performance |
| Timeline |
| Suzhou Mingzhi Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jiangsu Financial Leasing |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Suzhou Mingzhi and Jiangsu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzhou Mingzhi and Jiangsu Financial
The main advantage of trading using opposite Suzhou Mingzhi and Jiangsu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzhou Mingzhi position performs unexpectedly, Jiangsu Financial 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 Jiangsu Financial will offset losses from the drop in Jiangsu Financial's long position.The idea behind Suzhou Mingzhi Technology and Jiangsu Financial Leasing 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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