Correlation Between Jiangsu GDK and Shanghai Rongtai
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By analyzing existing cross correlation between Jiangsu GDK Biotechnology and Shanghai Rongtai Health, you can compare the effects of market volatilities on Jiangsu GDK and Shanghai Rongtai 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 Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu GDK and Shanghai Rongtai.
Diversification Opportunities for Jiangsu GDK and Shanghai Rongtai
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangsu and Shanghai is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu GDK Biotechnology and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health 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 Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Jiangsu GDK i.e., Jiangsu GDK and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Jiangsu GDK and Shanghai Rongtai
Assuming the 90 days trading horizon Jiangsu GDK Biotechnology is expected to under-perform the Shanghai Rongtai. In addition to that, Jiangsu GDK is 1.45 times more volatile than Shanghai Rongtai Health. It trades about -0.05 of its total potential returns per unit of risk. Shanghai Rongtai Health is currently generating about -0.02 per unit of volatility. If you would invest 2,046 in Shanghai Rongtai Health on October 19, 2024 and sell it today you would lose (646.00) from holding Shanghai Rongtai Health or give up 31.57% 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. Shanghai Rongtai Health
Performance |
| Timeline |
| Jiangsu GDK Biotechnology |
| Shanghai Rongtai Health |
Jiangsu GDK and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu GDK and Shanghai Rongtai
The main advantage of trading using opposite Jiangsu GDK and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu GDK position performs unexpectedly, Shanghai Rongtai 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 Shanghai Rongtai will offset losses from the drop in Shanghai Rongtai's long position.| Jiangsu GDK vs. Jinsanjiang Silicon Material | Jiangsu GDK vs. Maoming Petro Chemical Shihua | Jiangsu GDK vs. Longxing Chemical Stock | Jiangsu GDK vs. Shandong Rike Chemical |
| Shanghai Rongtai vs. Ningxia Younglight Chemicals | Shanghai Rongtai vs. Jinhui Liquor Co | Shanghai Rongtai vs. Huasi Agricultural Development | Shanghai Rongtai vs. Weichai Heavy Machinery |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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