Correlation Between Jiangsu GDK and Xinjiang Communications
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By analyzing existing cross correlation between Jiangsu GDK Biotechnology and Xinjiang Communications Construction, you can compare the effects of market volatilities on Jiangsu GDK and Xinjiang Communications 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 Xinjiang Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu GDK and Xinjiang Communications.
Diversification Opportunities for Jiangsu GDK and Xinjiang Communications
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Xinjiang is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu GDK Biotechnology and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Communications 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 Xinjiang Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Communications has no effect on the direction of Jiangsu GDK i.e., Jiangsu GDK and Xinjiang Communications go up and down completely randomly.
Pair Corralation between Jiangsu GDK and Xinjiang Communications
Assuming the 90 days trading horizon Jiangsu GDK Biotechnology is expected to under-perform the Xinjiang Communications. In addition to that, Jiangsu GDK is 1.39 times more volatile than Xinjiang Communications Construction. It trades about -0.13 of its total potential returns per unit of risk. Xinjiang Communications Construction is currently generating about -0.18 per unit of volatility. If you would invest 1,150 in Xinjiang Communications Construction on October 30, 2024 and sell it today you would lose (77.00) from holding Xinjiang Communications Construction or give up 6.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu GDK Biotechnology vs. Xinjiang Communications Constr
Performance |
| Timeline |
| Jiangsu GDK Biotechnology |
| Xinjiang Communications |
Jiangsu GDK and Xinjiang Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu GDK and Xinjiang Communications
The main advantage of trading using opposite Jiangsu GDK and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu GDK position performs unexpectedly, Xinjiang Communications 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 Xinjiang Communications will offset losses from the drop in Xinjiang Communications' long position.| Jiangsu GDK vs. Heilongjiang Transport Development | Jiangsu GDK vs. Lander Sports Development | Jiangsu GDK vs. Guangzhou Tinci Materials | Jiangsu GDK vs. Jiangnan Mould Plastic |
| Xinjiang Communications vs. PetroChina Co Ltd | Xinjiang Communications vs. China Mobile Limited | Xinjiang Communications vs. CNOOC Limited | Xinjiang Communications vs. Ping An Insurance |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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