Correlation Between Gansu Jiu and Jiugui Liquor
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By analyzing existing cross correlation between Gansu Jiu Steel and Jiugui Liquor Co, you can compare the effects of market volatilities on Gansu Jiu and Jiugui Liquor 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 Gansu Jiu with a short position of Jiugui Liquor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Jiugui Liquor.
Diversification Opportunities for Gansu Jiu and Jiugui Liquor
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gansu and Jiugui is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Jiugui Liquor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiugui Liquor and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with Jiugui Liquor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiugui Liquor has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Jiugui Liquor go up and down completely randomly.
Pair Corralation between Gansu Jiu and Jiugui Liquor
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to under-perform the Jiugui Liquor. But the stock apears to be less risky and, when comparing its historical volatility, Gansu Jiu Steel is 1.13 times less risky than Jiugui Liquor. The stock trades about -0.49 of its potential returns per unit of risk. The Jiugui Liquor Co is currently generating about -0.34 of returns per unit of risk over similar time horizon. If you would invest 5,818 in Jiugui Liquor Co on October 8, 2024 and sell it today you would lose (914.00) from holding Jiugui Liquor Co or give up 15.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gansu Jiu Steel vs. Jiugui Liquor Co
Performance |
Timeline |
Gansu Jiu Steel |
Jiugui Liquor |
Gansu Jiu and Jiugui Liquor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gansu Jiu and Jiugui Liquor
The main advantage of trading using opposite Gansu Jiu and Jiugui Liquor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Jiugui Liquor 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 Jiugui Liquor will offset losses from the drop in Jiugui Liquor's long position.The idea behind Gansu Jiu Steel and Jiugui Liquor Co 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.Jiugui Liquor vs. China Petroleum Chemical | Jiugui Liquor vs. PetroChina Co Ltd | Jiugui Liquor vs. China Railway Construction | Jiugui Liquor vs. China Mobile Limited |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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