Correlation Between Jiaozuo Wanfang and HaiXin Foods
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By analyzing existing cross correlation between Jiaozuo Wanfang Aluminum and HaiXin Foods Co, you can compare the effects of market volatilities on Jiaozuo Wanfang and HaiXin Foods 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 Jiaozuo Wanfang with a short position of HaiXin Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiaozuo Wanfang and HaiXin Foods.
Diversification Opportunities for Jiaozuo Wanfang and HaiXin Foods
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jiaozuo and HaiXin is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Jiaozuo Wanfang Aluminum and HaiXin Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HaiXin Foods and Jiaozuo Wanfang 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 Jiaozuo Wanfang Aluminum are associated (or correlated) with HaiXin Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HaiXin Foods has no effect on the direction of Jiaozuo Wanfang i.e., Jiaozuo Wanfang and HaiXin Foods go up and down completely randomly.
Pair Corralation between Jiaozuo Wanfang and HaiXin Foods
Assuming the 90 days trading horizon Jiaozuo Wanfang Aluminum is expected to generate 0.73 times more return on investment than HaiXin Foods. However, Jiaozuo Wanfang Aluminum is 1.36 times less risky than HaiXin Foods. It trades about 0.09 of its potential returns per unit of risk. HaiXin Foods Co is currently generating about -0.06 per unit of risk. If you would invest 697.00 in Jiaozuo Wanfang Aluminum on November 7, 2024 and sell it today you would earn a total of 19.00 from holding Jiaozuo Wanfang Aluminum or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiaozuo Wanfang Aluminum vs. HaiXin Foods Co
Performance |
| Timeline |
| Jiaozuo Wanfang Aluminum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HaiXin Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jiaozuo Wanfang and HaiXin Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiaozuo Wanfang and HaiXin Foods
The main advantage of trading using opposite Jiaozuo Wanfang and HaiXin Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiaozuo Wanfang position performs unexpectedly, HaiXin Foods 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 HaiXin Foods will offset losses from the drop in HaiXin Foods' long position.The idea behind Jiaozuo Wanfang Aluminum and HaiXin Foods 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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