Correlation Between Jiangsu GDK and Tongyu Communication
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By analyzing existing cross correlation between Jiangsu GDK Biotechnology and Tongyu Communication, you can compare the effects of market volatilities on Jiangsu GDK and Tongyu Communication 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 Tongyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu GDK and Tongyu Communication.
Diversification Opportunities for Jiangsu GDK and Tongyu Communication
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangsu and Tongyu is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu GDK Biotechnology and Tongyu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongyu Communication 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 Tongyu Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongyu Communication has no effect on the direction of Jiangsu GDK i.e., Jiangsu GDK and Tongyu Communication go up and down completely randomly.
Pair Corralation between Jiangsu GDK and Tongyu Communication
Assuming the 90 days trading horizon Jiangsu GDK Biotechnology is expected to under-perform the Tongyu Communication. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu GDK Biotechnology is 1.08 times less risky than Tongyu Communication. The stock trades about -0.28 of its potential returns per unit of risk. The Tongyu Communication is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,540 in Tongyu Communication on October 20, 2024 and sell it today you would lose (112.00) from holding Tongyu Communication or give up 7.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu GDK Biotechnology vs. Tongyu Communication
Performance |
| Timeline |
| Jiangsu GDK Biotechnology |
| Tongyu Communication |
Jiangsu GDK and Tongyu Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu GDK and Tongyu Communication
The main advantage of trading using opposite Jiangsu GDK and Tongyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu GDK position performs unexpectedly, Tongyu Communication 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 Tongyu Communication will offset losses from the drop in Tongyu Communication's long position.| Jiangsu GDK vs. Zhengzhou Coal Mining | Jiangsu GDK vs. Hangzhou Arcvideo Technology | Jiangsu GDK vs. Gansu Huangtai Wine marketing | Jiangsu GDK vs. Guangdong Jingyi Metal |
| Tongyu Communication vs. China Sports Industry | Tongyu Communication vs. Kangxin New Materials | Tongyu Communication vs. CSSC Offshore Marine | Tongyu Communication vs. Orinko Advanced Plastics |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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