Correlation Between Jiangsu Expressway and Ferrovial
Can any of the company-specific risk be diversified away by investing in both Jiangsu Expressway and Ferrovial 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 Ferrovial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jiangsu Expressway Co and Ferrovial SA, you can compare the effects of market volatilities on Jiangsu Expressway and Ferrovial 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 Ferrovial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Expressway and Ferrovial.
Diversification Opportunities for Jiangsu Expressway and Ferrovial
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jiangsu and Ferrovial is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Expressway Co and Ferrovial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrovial SA 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 Co are associated (or correlated) with Ferrovial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrovial SA has no effect on the direction of Jiangsu Expressway i.e., Jiangsu Expressway and Ferrovial go up and down completely randomly.
Pair Corralation between Jiangsu Expressway and Ferrovial
Assuming the 90 days horizon Jiangsu Expressway Co is expected to generate 2.3 times more return on investment than Ferrovial. However, Jiangsu Expressway is 2.3 times more volatile than Ferrovial SA. It trades about 0.03 of its potential returns per unit of risk. Ferrovial SA is currently generating about 0.05 per unit of risk. If you would invest 1,700 in Jiangsu Expressway Co on August 26, 2024 and sell it today you would earn a total of 292.00 from holding Jiangsu Expressway Co or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.79% |
| Values | Daily Returns |
Jiangsu Expressway Co vs. Ferrovial SA
Performance |
| Timeline |
| Jiangsu Expressway |
| Ferrovial SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jiangsu Expressway and Ferrovial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Expressway and Ferrovial
The main advantage of trading using opposite Jiangsu Expressway and Ferrovial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Expressway position performs unexpectedly, Ferrovial 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 Ferrovial will offset losses from the drop in Ferrovial's long position.| Jiangsu Expressway vs. LB Foster | Jiangsu Expressway vs. Boyd Gaming | Jiangsu Expressway vs. Cedar Realty Trust | Jiangsu Expressway vs. Olympic Steel |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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