Correlation Between Nasdaq and Jiangxi Lianchuang
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By analyzing existing cross correlation between Nasdaq Inc and Jiangxi Lianchuang Opto electronic, you can compare the effects of market volatilities on Nasdaq and Jiangxi Lianchuang 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 Nasdaq with a short position of Jiangxi Lianchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Jiangxi Lianchuang.
Diversification Opportunities for Nasdaq and Jiangxi Lianchuang
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nasdaq and Jiangxi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Jiangxi Lianchuang Opto electr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Lianchuang Opto and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Jiangxi Lianchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Lianchuang Opto has no effect on the direction of Nasdaq i.e., Nasdaq and Jiangxi Lianchuang go up and down completely randomly.
Pair Corralation between Nasdaq and Jiangxi Lianchuang
Given the investment horizon of 90 days Nasdaq is expected to generate 4.93 times less return on investment than Jiangxi Lianchuang. But when comparing it to its historical volatility, Nasdaq Inc is 5.6 times less risky than Jiangxi Lianchuang. It trades about 0.18 of its potential returns per unit of risk. Jiangxi Lianchuang Opto electronic is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,236 in Jiangxi Lianchuang Opto electronic on September 19, 2024 and sell it today you would earn a total of 1,204 from holding Jiangxi Lianchuang Opto electronic or generate 37.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq Inc vs. Jiangxi Lianchuang Opto electr
Performance |
| Timeline |
| Nasdaq Inc |
| Jiangxi Lianchuang Opto |
Nasdaq and Jiangxi Lianchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Jiangxi Lianchuang
The main advantage of trading using opposite Nasdaq and Jiangxi Lianchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Jiangxi Lianchuang 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 Jiangxi Lianchuang will offset losses from the drop in Jiangxi Lianchuang's long position.The idea behind Nasdaq Inc and Jiangxi Lianchuang Opto electronic 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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