Correlation Between Caihong Display and Jiangsu Yanghe
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By analyzing existing cross correlation between Caihong Display Devices and Jiangsu Yanghe Brewery, you can compare the effects of market volatilities on Caihong Display and Jiangsu Yanghe 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 Caihong Display with a short position of Jiangsu Yanghe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Jiangsu Yanghe.
Diversification Opportunities for Caihong Display and Jiangsu Yanghe
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caihong and Jiangsu is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Jiangsu Yanghe Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Yanghe Brewery and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Jiangsu Yanghe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Yanghe Brewery has no effect on the direction of Caihong Display i.e., Caihong Display and Jiangsu Yanghe go up and down completely randomly.
Pair Corralation between Caihong Display and Jiangsu Yanghe
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 1.14 times more return on investment than Jiangsu Yanghe. However, Caihong Display is 1.14 times more volatile than Jiangsu Yanghe Brewery. It trades about 0.16 of its potential returns per unit of risk. Jiangsu Yanghe Brewery is currently generating about 0.0 per unit of risk. If you would invest 658.00 in Caihong Display Devices on September 26, 2024 and sell it today you would earn a total of 192.00 from holding Caihong Display Devices or generate 29.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Caihong Display Devices vs. Jiangsu Yanghe Brewery
Performance |
Timeline |
Caihong Display Devices |
Jiangsu Yanghe Brewery |
Caihong Display and Jiangsu Yanghe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Caihong Display and Jiangsu Yanghe
The main advantage of trading using opposite Caihong Display and Jiangsu Yanghe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Jiangsu Yanghe 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 Yanghe will offset losses from the drop in Jiangsu Yanghe's long position.Caihong Display vs. Industrial and Commercial | Caihong Display vs. China Construction Bank | Caihong Display vs. Agricultural Bank of | Caihong Display vs. Bank of China |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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