Correlation Between Gansu Jiu and Chengdu Spaceon
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By analyzing existing cross correlation between Gansu Jiu Steel and Chengdu Spaceon Electronics, you can compare the effects of market volatilities on Gansu Jiu and Chengdu Spaceon 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 Gansu Jiu with a short position of Chengdu Spaceon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and Chengdu Spaceon.
Diversification Opportunities for Gansu Jiu and Chengdu Spaceon
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Chengdu is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and Chengdu Spaceon Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Spaceon Elec and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with Chengdu Spaceon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Spaceon Elec has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and Chengdu Spaceon go up and down completely randomly.
Pair Corralation between Gansu Jiu and Chengdu Spaceon
Assuming the 90 days trading horizon Gansu Jiu Steel is expected to generate 1.22 times more return on investment than Chengdu Spaceon. However, Gansu Jiu is 1.22 times more volatile than Chengdu Spaceon Electronics. It trades about 0.21 of its potential returns per unit of risk. Chengdu Spaceon Electronics is currently generating about 0.21 per unit of risk. If you would invest 124.00 in Gansu Jiu Steel on September 13, 2024 and sell it today you would earn a total of 69.00 from holding Gansu Jiu Steel or generate 55.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Gansu Jiu Steel vs. Chengdu Spaceon Electronics
Performance |
Timeline |
Gansu Jiu Steel |
Chengdu Spaceon Elec |
Gansu Jiu and Chengdu Spaceon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gansu Jiu and Chengdu Spaceon
The main advantage of trading using opposite Gansu Jiu and Chengdu Spaceon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Jiu position performs unexpectedly, Chengdu Spaceon 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 Chengdu Spaceon will offset losses from the drop in Chengdu Spaceon's long position.Gansu Jiu vs. China Construction Bank | Gansu Jiu vs. Industrial Bank Co | Gansu Jiu vs. Gansu Huangtai Wine marketing | Gansu Jiu vs. Guosheng Financial Holding |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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