Correlation Between Liaoning Chengda and Jiangsu Pacific
Specify exactly 2 symbols:
By analyzing existing cross correlation between Liaoning Chengda Biotechnology and Jiangsu Pacific Quartz, you can compare the effects of market volatilities on Liaoning Chengda 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 Liaoning Chengda with a short position of Jiangsu Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Chengda and Jiangsu Pacific.
Diversification Opportunities for Liaoning Chengda and Jiangsu Pacific
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Liaoning and Jiangsu is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Chengda 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 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 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 Liaoning Chengda i.e., Liaoning Chengda and Jiangsu Pacific go up and down completely randomly.
Pair Corralation between Liaoning Chengda and Jiangsu Pacific
Assuming the 90 days trading horizon Liaoning Chengda Biotechnology is expected to generate 0.47 times more return on investment than Jiangsu Pacific. However, Liaoning Chengda Biotechnology is 2.13 times less risky than Jiangsu Pacific. It trades about -0.01 of its potential returns per unit of risk. Jiangsu Pacific Quartz is currently generating about -0.07 per unit of risk. If you would invest 3,115 in Liaoning Chengda Biotechnology on November 8, 2024 and sell it today you would lose (491.00) from holding Liaoning Chengda Biotechnology or give up 15.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Chengda Biotechnology vs. Jiangsu Pacific Quartz
Performance |
| Timeline |
| Liaoning Chengda Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jiangsu Pacific Quartz |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Liaoning Chengda and Jiangsu Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Chengda and Jiangsu Pacific
The main advantage of trading using opposite Liaoning Chengda and Jiangsu Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Chengda 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 Liaoning Chengda 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |