Correlation Between Jiangsu Xinri and Guodian Nanjing
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By analyzing existing cross correlation between Jiangsu Xinri E Vehicle and Guodian Nanjing Automation, you can compare the effects of market volatilities on Jiangsu Xinri and Guodian Nanjing 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 Xinri with a short position of Guodian Nanjing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Xinri and Guodian Nanjing.
Diversification Opportunities for Jiangsu Xinri and Guodian Nanjing
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangsu and Guodian is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Xinri E Vehicle and Guodian Nanjing Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guodian Nanjing Auto and Jiangsu Xinri 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 Xinri E Vehicle are associated (or correlated) with Guodian Nanjing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guodian Nanjing Auto has no effect on the direction of Jiangsu Xinri i.e., Jiangsu Xinri and Guodian Nanjing go up and down completely randomly.
Pair Corralation between Jiangsu Xinri and Guodian Nanjing
Assuming the 90 days trading horizon Jiangsu Xinri E Vehicle is expected to generate 1.16 times more return on investment than Guodian Nanjing. However, Jiangsu Xinri is 1.16 times more volatile than Guodian Nanjing Automation. It trades about 0.14 of its potential returns per unit of risk. Guodian Nanjing Automation is currently generating about 0.15 per unit of risk. If you would invest 969.00 in Jiangsu Xinri E Vehicle on September 18, 2024 and sell it today you would earn a total of 215.00 from holding Jiangsu Xinri E Vehicle or generate 22.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Jiangsu Xinri E Vehicle vs. Guodian Nanjing Automation
Performance |
Timeline |
Jiangsu Xinri E |
Guodian Nanjing Auto |
Jiangsu Xinri and Guodian Nanjing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jiangsu Xinri and Guodian Nanjing
The main advantage of trading using opposite Jiangsu Xinri and Guodian Nanjing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Xinri position performs unexpectedly, Guodian Nanjing 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 Guodian Nanjing will offset losses from the drop in Guodian Nanjing's long position.Jiangsu Xinri vs. Lutian Machinery Co | Jiangsu Xinri vs. China Longyuan Power | Jiangsu Xinri vs. PetroChina Co Ltd | Jiangsu Xinri 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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