Correlation Between Nanhua Bio and Juewei Food
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By analyzing existing cross correlation between Nanhua Bio Medicine and Juewei Food Co, you can compare the effects of market volatilities on Nanhua Bio and Juewei Food 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 Nanhua Bio with a short position of Juewei Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanhua Bio and Juewei Food.
Diversification Opportunities for Nanhua Bio and Juewei Food
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanhua and Juewei is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nanhua Bio Medicine and Juewei Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juewei Food and Nanhua Bio 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 Nanhua Bio Medicine are associated (or correlated) with Juewei Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juewei Food has no effect on the direction of Nanhua Bio i.e., Nanhua Bio and Juewei Food go up and down completely randomly.
Pair Corralation between Nanhua Bio and Juewei Food
Assuming the 90 days trading horizon Nanhua Bio Medicine is expected to generate 1.26 times more return on investment than Juewei Food. However, Nanhua Bio is 1.26 times more volatile than Juewei Food Co. It trades about 0.0 of its potential returns per unit of risk. Juewei Food Co is currently generating about -0.08 per unit of risk. If you would invest 1,167 in Nanhua Bio Medicine on November 7, 2024 and sell it today you would lose (282.00) from holding Nanhua Bio Medicine or give up 24.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanhua Bio Medicine vs. Juewei Food Co
Performance |
| Timeline |
| Nanhua Bio Medicine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Juewei Food |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nanhua Bio and Juewei Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanhua Bio and Juewei Food
The main advantage of trading using opposite Nanhua Bio and Juewei Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanhua Bio position performs unexpectedly, Juewei Food 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 Juewei Food will offset losses from the drop in Juewei Food's long position.The idea behind Nanhua Bio Medicine and Juewei Food Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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