Correlation Between Anhui Jianghuai and Jiangsu Jinling
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and Jiangsu Jinling Sports, you can compare the effects of market volatilities on Anhui Jianghuai 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 Anhui Jianghuai with a short position of Jiangsu Jinling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and Jiangsu Jinling.
Diversification Opportunities for Anhui Jianghuai and Jiangsu Jinling
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anhui and Jiangsu is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile 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 Anhui Jianghuai 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 Anhui Jianghuai Automobile 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 Anhui Jianghuai i.e., Anhui Jianghuai and Jiangsu Jinling go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and Jiangsu Jinling
Assuming the 90 days trading horizon Anhui Jianghuai Automobile is expected to under-perform the Jiangsu Jinling. But the stock apears to be less risky and, when comparing its historical volatility, Anhui Jianghuai Automobile is 1.22 times less risky than Jiangsu Jinling. The stock trades about -0.05 of its potential returns per unit of risk. The Jiangsu Jinling Sports is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,361 in Jiangsu Jinling Sports on September 23, 2024 and sell it today you would earn a total of 142.00 from holding Jiangsu Jinling Sports or generate 10.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Anhui Jianghuai Automobile vs. Jiangsu Jinling Sports
Performance |
Timeline |
Anhui Jianghuai Auto |
Jiangsu Jinling Sports |
Anhui Jianghuai and Jiangsu Jinling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Anhui Jianghuai and Jiangsu Jinling
The main advantage of trading using opposite Anhui Jianghuai and Jiangsu Jinling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai 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.Anhui Jianghuai vs. New China Life | Anhui Jianghuai vs. Ming Yang Smart | Anhui Jianghuai vs. 159681 | Anhui Jianghuai vs. 159005 |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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