Correlation Between Changjiang Jinggong and Guangzhou Jointas
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By analyzing existing cross correlation between Changjiang Jinggong Steel and Guangzhou Jointas Chemical, you can compare the effects of market volatilities on Changjiang Jinggong and Guangzhou Jointas 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 Changjiang Jinggong with a short position of Guangzhou Jointas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changjiang Jinggong and Guangzhou Jointas.
Diversification Opportunities for Changjiang Jinggong and Guangzhou Jointas
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changjiang and Guangzhou is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Changjiang Jinggong Steel and Guangzhou Jointas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jointas and Changjiang Jinggong 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 Changjiang Jinggong Steel are associated (or correlated) with Guangzhou Jointas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jointas has no effect on the direction of Changjiang Jinggong i.e., Changjiang Jinggong and Guangzhou Jointas go up and down completely randomly.
Pair Corralation between Changjiang Jinggong and Guangzhou Jointas
Assuming the 90 days trading horizon Changjiang Jinggong is expected to generate 1.28 times less return on investment than Guangzhou Jointas. But when comparing it to its historical volatility, Changjiang Jinggong Steel is 1.34 times less risky than Guangzhou Jointas. It trades about 0.25 of its potential returns per unit of risk. Guangzhou Jointas Chemical is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 394.00 in Guangzhou Jointas Chemical on September 12, 2024 and sell it today you would earn a total of 203.00 from holding Guangzhou Jointas Chemical or generate 51.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Changjiang Jinggong Steel vs. Guangzhou Jointas Chemical
Performance |
Timeline |
Changjiang Jinggong Steel |
Guangzhou Jointas |
Changjiang Jinggong and Guangzhou Jointas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Changjiang Jinggong and Guangzhou Jointas
The main advantage of trading using opposite Changjiang Jinggong and Guangzhou Jointas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changjiang Jinggong position performs unexpectedly, Guangzhou Jointas 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 Guangzhou Jointas will offset losses from the drop in Guangzhou Jointas' long position.Changjiang Jinggong vs. Sichuan Fulin Transportation | Changjiang Jinggong vs. Winner Medical Co | Changjiang Jinggong vs. GKHT Medical Technology | Changjiang Jinggong vs. Lander Sports Development |
Guangzhou Jointas vs. Zijin Mining Group | Guangzhou Jointas vs. Wanhua Chemical Group | Guangzhou Jointas vs. Baoshan Iron Steel | Guangzhou Jointas vs. Rongsheng Petrochemical Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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