Correlation Between Huadong Medicine and Jiahe Foods
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By analyzing existing cross correlation between Huadong Medicine Co and Jiahe Foods Industry, you can compare the effects of market volatilities on Huadong Medicine and Jiahe 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 Huadong Medicine with a short position of Jiahe Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huadong Medicine and Jiahe Foods.
Diversification Opportunities for Huadong Medicine and Jiahe Foods
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huadong and Jiahe is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Huadong Medicine Co and Jiahe Foods Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiahe Foods Industry and Huadong Medicine 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 Huadong Medicine Co are associated (or correlated) with Jiahe Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiahe Foods Industry has no effect on the direction of Huadong Medicine i.e., Huadong Medicine and Jiahe Foods go up and down completely randomly.
Pair Corralation between Huadong Medicine and Jiahe Foods
Assuming the 90 days trading horizon Huadong Medicine Co is expected to generate 0.74 times more return on investment than Jiahe Foods. However, Huadong Medicine Co is 1.35 times less risky than Jiahe Foods. It trades about -0.02 of its potential returns per unit of risk. Jiahe Foods Industry is currently generating about -0.03 per unit of risk. If you would invest 4,019 in Huadong Medicine Co on October 16, 2024 and sell it today you would lose (785.00) from holding Huadong Medicine Co or give up 19.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huadong Medicine Co vs. Jiahe Foods Industry
Performance |
| Timeline |
| Huadong Medicine |
| Jiahe Foods Industry |
Huadong Medicine and Jiahe Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huadong Medicine and Jiahe Foods
The main advantage of trading using opposite Huadong Medicine and Jiahe Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huadong Medicine position performs unexpectedly, Jiahe 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 Jiahe Foods will offset losses from the drop in Jiahe Foods' long position.| Huadong Medicine vs. Jiahe Foods Industry | Huadong Medicine vs. V V Food | Huadong Medicine vs. Shanghai Ziyan Foods | Huadong Medicine vs. Heilongjiang Transport Development |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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