Correlation Between Beijing Wandong and Jiangxi JDL
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By analyzing existing cross correlation between Beijing Wandong Medical and Jiangxi JDL Environmental, you can compare the effects of market volatilities on Beijing Wandong and Jiangxi JDL 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 Beijing Wandong with a short position of Jiangxi JDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wandong and Jiangxi JDL.
Diversification Opportunities for Beijing Wandong and Jiangxi JDL
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Jiangxi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wandong Medical and Jiangxi JDL Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi JDL Environmental and Beijing Wandong 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 Beijing Wandong Medical are associated (or correlated) with Jiangxi JDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi JDL Environmental has no effect on the direction of Beijing Wandong i.e., Beijing Wandong and Jiangxi JDL go up and down completely randomly.
Pair Corralation between Beijing Wandong and Jiangxi JDL
Assuming the 90 days trading horizon Beijing Wandong Medical is expected to generate 1.16 times more return on investment than Jiangxi JDL. However, Beijing Wandong is 1.16 times more volatile than Jiangxi JDL Environmental. It trades about 0.2 of its potential returns per unit of risk. Jiangxi JDL Environmental is currently generating about 0.19 per unit of risk. If you would invest 1,191 in Beijing Wandong Medical on September 15, 2024 and sell it today you would earn a total of 488.00 from holding Beijing Wandong Medical or generate 40.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Beijing Wandong Medical vs. Jiangxi JDL Environmental
Performance |
Timeline |
Beijing Wandong Medical |
Jiangxi JDL Environmental |
Beijing Wandong and Jiangxi JDL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing Wandong and Jiangxi JDL
The main advantage of trading using opposite Beijing Wandong and Jiangxi JDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wandong position performs unexpectedly, Jiangxi JDL 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 Jiangxi JDL will offset losses from the drop in Jiangxi JDL's long position.Beijing Wandong vs. Duzhe Publishing Media | Beijing Wandong vs. Threes Company Media | Beijing Wandong vs. Zoy Home Furnishing | Beijing Wandong vs. Suofeiya Home Collection |
Jiangxi JDL vs. Hunan Investment Group | Jiangxi JDL vs. Touchstone International Medical | Jiangxi JDL vs. Tieling Newcity Investment | Jiangxi JDL vs. Beijing Wandong Medical |
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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