Correlation Between Jiangsu GDK and Linzhou Heavy
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By analyzing existing cross correlation between Jiangsu GDK Biotechnology and Linzhou Heavy Machinery, you can compare the effects of market volatilities on Jiangsu GDK and Linzhou Heavy 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 GDK with a short position of Linzhou Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu GDK and Linzhou Heavy.
Diversification Opportunities for Jiangsu GDK and Linzhou Heavy
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangsu and Linzhou is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu GDK Biotechnology and Linzhou Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linzhou Heavy Machinery and Jiangsu GDK 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 GDK Biotechnology are associated (or correlated) with Linzhou Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linzhou Heavy Machinery has no effect on the direction of Jiangsu GDK i.e., Jiangsu GDK and Linzhou Heavy go up and down completely randomly.
Pair Corralation between Jiangsu GDK and Linzhou Heavy
Assuming the 90 days trading horizon Jiangsu GDK Biotechnology is expected to under-perform the Linzhou Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu GDK Biotechnology is 1.09 times less risky than Linzhou Heavy. The stock trades about -0.2 of its potential returns per unit of risk. The Linzhou Heavy Machinery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 376.00 in Linzhou Heavy Machinery on October 16, 2024 and sell it today you would earn a total of 9.00 from holding Linzhou Heavy Machinery or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu GDK Biotechnology vs. Linzhou Heavy Machinery
Performance |
| Timeline |
| Jiangsu GDK Biotechnology |
| Linzhou Heavy Machinery |
Jiangsu GDK and Linzhou Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu GDK and Linzhou Heavy
The main advantage of trading using opposite Jiangsu GDK and Linzhou Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu GDK position performs unexpectedly, Linzhou Heavy 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 Linzhou Heavy will offset losses from the drop in Linzhou Heavy's long position.| Jiangsu GDK vs. Shenzhen Kexin Communication | Jiangsu GDK vs. Nexchip Semiconductor Corp | Jiangsu GDK vs. Semiconductor Manufacturing Intl | Jiangsu GDK vs. Will Semiconductor Co |
| Linzhou Heavy vs. Tianjin Hi Tech Development | Linzhou Heavy vs. Jiangsu GDK Biotechnology | Linzhou Heavy vs. Shanghai Rightongene Biotechnology | Linzhou Heavy vs. Sichuan Jinshi Technology |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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