Correlation Between Jiangxi Hengda and New Trend
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By analyzing existing cross correlation between Jiangxi Hengda Hi Tech and New Trend International, you can compare the effects of market volatilities on Jiangxi Hengda and New Trend 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 Hengda with a short position of New Trend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Hengda and New Trend.
Diversification Opportunities for Jiangxi Hengda and New Trend
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangxi and New is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Hengda Hi Tech and New Trend International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Trend International and Jiangxi Hengda 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 Hengda Hi Tech are associated (or correlated) with New Trend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Trend International has no effect on the direction of Jiangxi Hengda i.e., Jiangxi Hengda and New Trend go up and down completely randomly.
Pair Corralation between Jiangxi Hengda and New Trend
Assuming the 90 days trading horizon Jiangxi Hengda Hi Tech is expected to generate 0.65 times more return on investment than New Trend. However, Jiangxi Hengda Hi Tech is 1.53 times less risky than New Trend. It trades about 0.19 of its potential returns per unit of risk. New Trend International is currently generating about 0.12 per unit of risk. If you would invest 423.00 in Jiangxi Hengda Hi Tech on September 23, 2024 and sell it today you would earn a total of 172.00 from holding Jiangxi Hengda Hi Tech or generate 40.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Jiangxi Hengda Hi Tech vs. New Trend International
Performance |
Timeline |
Jiangxi Hengda Hi |
New Trend International |
Jiangxi Hengda and New Trend Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jiangxi Hengda and New Trend
The main advantage of trading using opposite Jiangxi Hengda and New Trend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Hengda position performs unexpectedly, New Trend 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 New Trend will offset losses from the drop in New Trend's long position.Jiangxi Hengda vs. Zijin Mining Group | Jiangxi Hengda vs. Wanhua Chemical Group | Jiangxi Hengda vs. Baoshan Iron Steel | Jiangxi Hengda vs. Shandong Gold Mining |
New Trend vs. Guangdong Shenglu Telecommunication | New Trend vs. Dhc Software Co | New Trend vs. Eastern Communications Co | New Trend vs. Jiangxi Hengda Hi Tech |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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