Correlation Between Arcosa and Jiangsu Expressway
Can any of the company-specific risk be diversified away by investing in both Arcosa and Jiangsu Expressway at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Arcosa and Jiangsu Expressway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcosa Inc and Jiangsu Expressway, you can compare the effects of market volatilities on Arcosa and Jiangsu Expressway 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 Arcosa with a short position of Jiangsu Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcosa and Jiangsu Expressway.
Diversification Opportunities for Arcosa and Jiangsu Expressway
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arcosa and Jiangsu is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Arcosa Inc and Jiangsu Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Expressway and Arcosa 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 Arcosa Inc are associated (or correlated) with Jiangsu Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Expressway has no effect on the direction of Arcosa i.e., Arcosa and Jiangsu Expressway go up and down completely randomly.
Pair Corralation between Arcosa and Jiangsu Expressway
Assuming the 90 days horizon Arcosa Inc is expected to generate 0.87 times more return on investment than Jiangsu Expressway. However, Arcosa Inc is 1.15 times less risky than Jiangsu Expressway. It trades about 0.06 of its potential returns per unit of risk. Jiangsu Expressway is currently generating about -0.11 per unit of risk. If you would invest 9,400 in Arcosa Inc on November 18, 2024 and sell it today you would earn a total of 150.00 from holding Arcosa Inc or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcosa Inc vs. Jiangsu Expressway
Performance |
| Timeline |
| Arcosa Inc |
| Jiangsu Expressway |
Arcosa and Jiangsu Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcosa and Jiangsu Expressway
The main advantage of trading using opposite Arcosa and Jiangsu Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcosa position performs unexpectedly, Jiangsu Expressway 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 Expressway will offset losses from the drop in Jiangsu Expressway's long position.| Arcosa vs. Transurban Group | Arcosa vs. Getlink SE | Arcosa vs. Jiangsu Expressway | Arcosa vs. Zhejiang Expressway Co |
| Jiangsu Expressway vs. PLAYTIKA HOLDING DL 01 | Jiangsu Expressway vs. InPlay Oil Corp | Jiangsu Expressway vs. Aristocrat Leisure Limited | Jiangsu Expressway vs. LG Display Co |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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