Correlation Between Jiangsu GDK and Jiangsu Pacific
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By analyzing existing cross correlation between Jiangsu GDK Biotechnology and Jiangsu Pacific Quartz, you can compare the effects of market volatilities on Jiangsu GDK and Jiangsu Pacific 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 Jiangsu Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu GDK and Jiangsu Pacific.
Diversification Opportunities for Jiangsu GDK and Jiangsu Pacific
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Jiangsu is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu GDK Biotechnology and Jiangsu Pacific Quartz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Pacific Quartz 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 Jiangsu Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Pacific Quartz has no effect on the direction of Jiangsu GDK i.e., Jiangsu GDK and Jiangsu Pacific go up and down completely randomly.
Pair Corralation between Jiangsu GDK and Jiangsu Pacific
Assuming the 90 days trading horizon Jiangsu GDK Biotechnology is expected to generate 1.48 times more return on investment than Jiangsu Pacific. However, Jiangsu GDK is 1.48 times more volatile than Jiangsu Pacific Quartz. It trades about 0.11 of its potential returns per unit of risk. Jiangsu Pacific Quartz is currently generating about 0.02 per unit of risk. If you would invest 1,183 in Jiangsu GDK Biotechnology on November 8, 2024 and sell it today you would earn a total of 57.00 from holding Jiangsu GDK Biotechnology or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu GDK Biotechnology vs. Jiangsu Pacific Quartz
Performance |
| Timeline |
| Jiangsu GDK Biotechnology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jiangsu Pacific Quartz |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jiangsu GDK and Jiangsu Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu GDK and Jiangsu Pacific
The main advantage of trading using opposite Jiangsu GDK and Jiangsu Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu GDK position performs unexpectedly, Jiangsu Pacific 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 Pacific will offset losses from the drop in Jiangsu Pacific's long position.The idea behind Jiangsu GDK Biotechnology and Jiangsu Pacific Quartz 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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