Correlation Between Shandong Hongchuang and Jiangsu Jinling
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By analyzing existing cross correlation between Shandong Hongchuang Aluminum and Jiangsu Jinling Sports, you can compare the effects of market volatilities on Shandong Hongchuang and Jiangsu Jinling 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 Shandong Hongchuang with a short position of Jiangsu Jinling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Hongchuang and Jiangsu Jinling.
Diversification Opportunities for Shandong Hongchuang and Jiangsu Jinling
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Jiangsu is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hongchuang Aluminum and Jiangsu Jinling Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Jinling Sports and Shandong Hongchuang 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 Shandong Hongchuang Aluminum are associated (or correlated) with Jiangsu Jinling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Jinling Sports has no effect on the direction of Shandong Hongchuang i.e., Shandong Hongchuang and Jiangsu Jinling go up and down completely randomly.
Pair Corralation between Shandong Hongchuang and Jiangsu Jinling
Assuming the 90 days trading horizon Shandong Hongchuang is expected to generate 1.38 times less return on investment than Jiangsu Jinling. But when comparing it to its historical volatility, Shandong Hongchuang Aluminum is 1.48 times less risky than Jiangsu Jinling. It trades about 0.27 of its potential returns per unit of risk. Jiangsu Jinling Sports is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,380 in Jiangsu Jinling Sports on September 20, 2024 and sell it today you would earn a total of 285.00 from holding Jiangsu Jinling Sports or generate 20.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shandong Hongchuang Aluminum vs. Jiangsu Jinling Sports
Performance |
Timeline |
Shandong Hongchuang |
Jiangsu Jinling Sports |
Shandong Hongchuang and Jiangsu Jinling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shandong Hongchuang and Jiangsu Jinling
The main advantage of trading using opposite Shandong Hongchuang and Jiangsu Jinling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Hongchuang position performs unexpectedly, Jiangsu Jinling 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 Jinling will offset losses from the drop in Jiangsu Jinling's long position.Shandong Hongchuang vs. ChengDu Hi Tech Development | Shandong Hongchuang vs. FSPG Hi Tech Co | Shandong Hongchuang vs. Qingdao Foods Co | Shandong Hongchuang vs. Guangzhou Haige Communications |
Jiangsu Jinling vs. Lutian Machinery Co | Jiangsu Jinling vs. China Longyuan Power | Jiangsu Jinling vs. PetroChina Co Ltd | Jiangsu Jinling vs. Bank of China |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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