Correlation Between Liaoning Chengda and Jiangsu Jinling
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By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Jiangsu Jinling Sports, you can compare the effects of market volatilities on Liaoning Chengda and Jiangsu Jinling 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 Liaoning Chengda with a short position of Jiangsu Jinling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Jiangsu Jinling.
Diversification Opportunities for Liaoning Chengda and Jiangsu Jinling
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liaoning and Jiangsu is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda Biotechnology and Jiangsu Jinling Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Jinling Sports and Liaoning Chengda 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 Liaoning Chengda Biotechnology are associated (or correlated) with Jiangsu Jinling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Jinling Sports has no effect on the direction of Liaoning Chengda i.e., Liaoning Chengda and Jiangsu Jinling go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Jiangsu Jinling
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to generate 0.24 times more return on investment than Jiangsu Jinling. However, Liaoning Chengda Biotechnology is 4.21 times less risky than Jiangsu Jinling. It trades about -0.08 of its potential returns per unit of risk. Jiangsu Jinling Sports is currently generating about -0.08 per unit of risk. If you would invest 2,696 in Liaoning Chengda Biotechnology on September 28, 2024 and sell it today you would lose (55.00) from holding Liaoning Chengda Biotechnology or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Jiangsu Jinling Sports
Performance |
| Timeline |
| Liaoning Chengda Bio |
| Jiangsu Jinling Sports |
Liaoning Chengda and Jiangsu Jinling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Jiangsu Jinling
The main advantage of trading using opposite Liaoning Chengda and Jiangsu Jinling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda position performs unexpectedly, Jiangsu Jinling 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 Jinling will offset losses from the drop in Jiangsu Jinling's long position.| Liaoning Chengda vs. Industrial and Commercial | Liaoning Chengda vs. Agricultural Bank of | Liaoning Chengda vs. China Construction Bank | Liaoning Chengda vs. Bank of China |
| Jiangsu Jinling vs. PetroChina Co Ltd | Jiangsu Jinling vs. China Mobile Limited | Jiangsu Jinling vs. CNOOC Limited | Jiangsu Jinling 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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