Correlation Between Qingdao Foods and Xiamen Jihong
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By analyzing existing cross correlation between Qingdao Foods Co and Xiamen Jihong Package, you can compare the effects of market volatilities on Qingdao Foods and Xiamen Jihong 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 Qingdao Foods with a short position of Xiamen Jihong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Foods and Xiamen Jihong.
Diversification Opportunities for Qingdao Foods and Xiamen Jihong
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qingdao and Xiamen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Foods Co and Xiamen Jihong Package in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Jihong Package and Qingdao Foods 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 Qingdao Foods Co are associated (or correlated) with Xiamen Jihong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Jihong Package has no effect on the direction of Qingdao Foods i.e., Qingdao Foods and Xiamen Jihong go up and down completely randomly.
Pair Corralation between Qingdao Foods and Xiamen Jihong
Assuming the 90 days trading horizon Qingdao Foods Co is expected to generate 0.68 times more return on investment than Xiamen Jihong. However, Qingdao Foods Co is 1.47 times less risky than Xiamen Jihong. It trades about -0.12 of its potential returns per unit of risk. Xiamen Jihong Package is currently generating about -0.21 per unit of risk. If you would invest 1,403 in Qingdao Foods Co on October 25, 2024 and sell it today you would lose (70.00) from holding Qingdao Foods Co or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Foods Co vs. Xiamen Jihong Package
Performance |
| Timeline |
| Qingdao Foods |
| Xiamen Jihong Package |
Qingdao Foods and Xiamen Jihong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Foods and Xiamen Jihong
The main advantage of trading using opposite Qingdao Foods and Xiamen Jihong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Foods position performs unexpectedly, Xiamen Jihong 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 Xiamen Jihong will offset losses from the drop in Xiamen Jihong's long position.| Qingdao Foods vs. Jiangsu Broadcasting Cable | Qingdao Foods vs. Silkroad Visual Technology | Qingdao Foods vs. Zhengping RoadBridge Constr | Qingdao Foods vs. Chongqing Road Bridge |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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