Correlation Between Jiangxi JDL and Jiangsu Pacific
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By analyzing existing cross correlation between Jiangxi JDL Environmental and Jiangsu Pacific Quartz, you can compare the effects of market volatilities on Jiangxi JDL and Jiangsu Pacific 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 Jiangxi JDL with a short position of Jiangsu Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi JDL and Jiangsu Pacific.
Diversification Opportunities for Jiangxi JDL and Jiangsu Pacific
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangxi and Jiangsu is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi JDL Environmental and Jiangsu Pacific Quartz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Pacific Quartz and Jiangxi JDL 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 Jiangxi JDL Environmental are associated (or correlated) with Jiangsu Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Pacific Quartz has no effect on the direction of Jiangxi JDL i.e., Jiangxi JDL and Jiangsu Pacific go up and down completely randomly.
Pair Corralation between Jiangxi JDL and Jiangsu Pacific
Assuming the 90 days trading horizon Jiangxi JDL is expected to generate 1.13 times less return on investment than Jiangsu Pacific. But when comparing it to its historical volatility, Jiangxi JDL Environmental is 1.42 times less risky than Jiangsu Pacific. It trades about 0.18 of its potential returns per unit of risk. Jiangsu Pacific Quartz is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,302 in Jiangsu Pacific Quartz on September 6, 2024 and sell it today you would earn a total of 734.00 from holding Jiangsu Pacific Quartz or generate 31.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Jiangxi JDL Environmental vs. Jiangsu Pacific Quartz
Performance |
Timeline |
Jiangxi JDL Environmental |
Jiangsu Pacific Quartz |
Jiangxi JDL and Jiangsu Pacific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jiangxi JDL and Jiangsu Pacific
The main advantage of trading using opposite Jiangxi JDL and Jiangsu Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi JDL position performs unexpectedly, Jiangsu Pacific 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 Pacific will offset losses from the drop in Jiangsu Pacific's long position.The idea behind Jiangxi JDL Environmental and Jiangsu Pacific Quartz 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.Jiangsu Pacific vs. Xinjiang Baodi Mining | Jiangsu Pacific vs. Yunnan Jianzhijia Health Chain | Jiangsu Pacific vs. Shandong Sinoglory Health | Jiangsu Pacific vs. Shengda Mining 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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