Correlation Between Jiangsu Expressway and Big 5
Can any of the company-specific risk be diversified away by investing in both Jiangsu Expressway and Big 5 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 Jiangsu Expressway and Big 5 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jiangsu Expressway and Big 5 Sporting, you can compare the effects of market volatilities on Jiangsu Expressway and Big 5 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 Expressway with a short position of Big 5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Expressway and Big 5.
Diversification Opportunities for Jiangsu Expressway and Big 5
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jiangsu and Big is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Expressway and Big 5 Sporting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big 5 Sporting and Jiangsu Expressway 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 Expressway are associated (or correlated) with Big 5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big 5 Sporting has no effect on the direction of Jiangsu Expressway i.e., Jiangsu Expressway and Big 5 go up and down completely randomly.
Pair Corralation between Jiangsu Expressway and Big 5
Assuming the 90 days horizon Jiangsu Expressway is expected to generate 1.92 times more return on investment than Big 5. However, Jiangsu Expressway is 1.92 times more volatile than Big 5 Sporting. It trades about 0.07 of its potential returns per unit of risk. Big 5 Sporting is currently generating about -0.07 per unit of risk. If you would invest 16.00 in Jiangsu Expressway on September 3, 2024 and sell it today you would earn a total of 74.00 from holding Jiangsu Expressway or generate 462.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Expressway vs. Big 5 Sporting
Performance |
| Timeline |
| Jiangsu Expressway |
| Big 5 Sporting |
Jiangsu Expressway and Big 5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Expressway and Big 5
The main advantage of trading using opposite Jiangsu Expressway and Big 5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Expressway position performs unexpectedly, Big 5 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 Big 5 will offset losses from the drop in Big 5's long position.| Jiangsu Expressway vs. Big 5 Sporting | Jiangsu Expressway vs. Gaztransport Technigaz SA | Jiangsu Expressway vs. Clean Energy Fuels | Jiangsu Expressway vs. TITANIUM TRANSPORTGROUP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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