Correlation Between Haima Automobile and Jiangsu Yanghe
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By analyzing existing cross correlation between Haima Automobile Group and Jiangsu Yanghe Brewery, you can compare the effects of market volatilities on Haima Automobile 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 Haima Automobile with a short position of Jiangsu Yanghe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haima Automobile and Jiangsu Yanghe.
Diversification Opportunities for Haima Automobile and Jiangsu Yanghe
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haima and Jiangsu is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Haima Automobile Group 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 Haima Automobile 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 Haima Automobile Group 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 Haima Automobile i.e., Haima Automobile and Jiangsu Yanghe go up and down completely randomly.
Pair Corralation between Haima Automobile and Jiangsu Yanghe
Assuming the 90 days trading horizon Haima Automobile Group is expected to generate 1.62 times more return on investment than Jiangsu Yanghe. However, Haima Automobile is 1.62 times more volatile than Jiangsu Yanghe Brewery. It trades about 0.06 of its potential returns per unit of risk. Jiangsu Yanghe Brewery is currently generating about 0.01 per unit of risk. If you would invest 324.00 in Haima Automobile Group on November 7, 2024 and sell it today you would earn a total of 70.00 from holding Haima Automobile Group or generate 21.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haima Automobile Group vs. Jiangsu Yanghe Brewery
Performance |
| Timeline |
| Haima Automobile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jiangsu Yanghe Brewery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Haima Automobile and Jiangsu Yanghe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haima Automobile and Jiangsu Yanghe
The main advantage of trading using opposite Haima Automobile and Jiangsu Yanghe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haima Automobile 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.The idea behind Haima Automobile Group and Jiangsu Yanghe Brewery 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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