Correlation Between Central Plains and Jinhui Liquor
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By analyzing existing cross correlation between Central Plains Environment and Jinhui Liquor Co, you can compare the effects of market volatilities on Central Plains and Jinhui Liquor 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 Central Plains with a short position of Jinhui Liquor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Plains and Jinhui Liquor.
Diversification Opportunities for Central Plains and Jinhui Liquor
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Central and Jinhui is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Central Plains Environment and Jinhui Liquor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhui Liquor and Central Plains 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 Central Plains Environment are associated (or correlated) with Jinhui Liquor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhui Liquor has no effect on the direction of Central Plains i.e., Central Plains and Jinhui Liquor go up and down completely randomly.
Pair Corralation between Central Plains and Jinhui Liquor
Assuming the 90 days trading horizon Central Plains Environment is expected to generate 0.9 times more return on investment than Jinhui Liquor. However, Central Plains Environment is 1.12 times less risky than Jinhui Liquor. It trades about 0.04 of its potential returns per unit of risk. Jinhui Liquor Co is currently generating about -0.02 per unit of risk. If you would invest 617.00 in Central Plains Environment on October 11, 2024 and sell it today you would earn a total of 208.00 from holding Central Plains Environment or generate 33.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Plains Environment vs. Jinhui Liquor Co
Performance |
| Timeline |
| Central Plains Envir |
| Jinhui Liquor |
Central Plains and Jinhui Liquor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Plains and Jinhui Liquor
The main advantage of trading using opposite Central Plains and Jinhui Liquor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Plains position performs unexpectedly, Jinhui Liquor 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 Jinhui Liquor will offset losses from the drop in Jinhui Liquor's long position.| Central Plains vs. Digiwin Software Co | Central Plains vs. Kuangda Technology Group | Central Plains vs. Keeson Technology Corp | Central Plains vs. Sinofibers Technology Co |
| Jinhui Liquor vs. Sunny Loan Top | Jinhui Liquor vs. Xinxiang Chemical Fiber | Jinhui Liquor vs. Wuxi Chemical Equipment | Jinhui Liquor vs. Semiconductor Manufacturing Intl |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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