Correlation Between Fujian Newland and Jiangsu Financial
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By analyzing existing cross correlation between Fujian Newland Computer and Jiangsu Financial Leasing, you can compare the effects of market volatilities on Fujian Newland and Jiangsu Financial 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 Fujian Newland with a short position of Jiangsu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Newland and Jiangsu Financial.
Diversification Opportunities for Fujian Newland and Jiangsu Financial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fujian and Jiangsu is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Newland Computer and Jiangsu Financial Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Financial Leasing and Fujian Newland 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 Fujian Newland Computer are associated (or correlated) with Jiangsu Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Financial Leasing has no effect on the direction of Fujian Newland i.e., Fujian Newland and Jiangsu Financial go up and down completely randomly.
Pair Corralation between Fujian Newland and Jiangsu Financial
Assuming the 90 days trading horizon Fujian Newland Computer is expected to generate 3.46 times more return on investment than Jiangsu Financial. However, Fujian Newland is 3.46 times more volatile than Jiangsu Financial Leasing. It trades about 0.08 of its potential returns per unit of risk. Jiangsu Financial Leasing is currently generating about 0.2 per unit of risk. If you would invest 1,975 in Fujian Newland Computer on September 25, 2024 and sell it today you would earn a total of 81.00 from holding Fujian Newland Computer or generate 4.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Fujian Newland Computer vs. Jiangsu Financial Leasing
Performance |
Timeline |
Fujian Newland Computer |
Jiangsu Financial Leasing |
Fujian Newland and Jiangsu Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fujian Newland and Jiangsu Financial
The main advantage of trading using opposite Fujian Newland and Jiangsu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Newland position performs unexpectedly, Jiangsu Financial 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 Financial will offset losses from the drop in Jiangsu Financial's long position.Fujian Newland vs. Industrial and Commercial | Fujian Newland vs. Agricultural Bank of | Fujian Newland vs. China Construction Bank | Fujian Newland vs. Bank of China |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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