Correlation Between Jiangsu Pacific and XCMG Construction
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By analyzing existing cross correlation between Jiangsu Pacific Quartz and XCMG Construction Machinery, you can compare the effects of market volatilities on Jiangsu Pacific and XCMG Construction 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 Jiangsu Pacific with a short position of XCMG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Pacific and XCMG Construction.
Diversification Opportunities for Jiangsu Pacific and XCMG Construction
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and XCMG is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Pacific Quartz and XCMG Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCMG Construction and Jiangsu Pacific 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 Jiangsu Pacific Quartz are associated (or correlated) with XCMG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCMG Construction has no effect on the direction of Jiangsu Pacific i.e., Jiangsu Pacific and XCMG Construction go up and down completely randomly.
Pair Corralation between Jiangsu Pacific and XCMG Construction
Assuming the 90 days trading horizon Jiangsu Pacific Quartz is expected to generate 1.57 times more return on investment than XCMG Construction. However, Jiangsu Pacific is 1.57 times more volatile than XCMG Construction Machinery. It trades about 0.16 of its potential returns per unit of risk. XCMG Construction Machinery is currently generating about 0.09 per unit of risk. If you would invest 2,160 in Jiangsu Pacific Quartz on September 23, 2024 and sell it today you would earn a total of 806.00 from holding Jiangsu Pacific Quartz or generate 37.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Jiangsu Pacific Quartz vs. XCMG Construction Machinery
Performance |
Timeline |
Jiangsu Pacific Quartz |
XCMG Construction |
Jiangsu Pacific and XCMG Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jiangsu Pacific and XCMG Construction
The main advantage of trading using opposite Jiangsu Pacific and XCMG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Pacific position performs unexpectedly, XCMG Construction 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 XCMG Construction will offset losses from the drop in XCMG Construction's long position.Jiangsu Pacific vs. Ming Yang Smart | Jiangsu Pacific vs. 159681 | Jiangsu Pacific vs. 159005 | Jiangsu Pacific vs. Loctek Ergonomic Technology |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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