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
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Qingdao and Xiamen is 0.94. 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 is expected to generate 1.35 times less return on investment than Xiamen Jihong. But when comparing it to its historical volatility, Qingdao Foods Co is 1.14 times less risky than Xiamen Jihong. It trades about 0.21 of its potential returns per unit of risk. Xiamen Jihong Package is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 990.00 in Xiamen Jihong Package on September 12, 2024 and sell it today you would earn a total of 613.00 from holding Xiamen Jihong Package or generate 61.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very 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. Zhejiang Xiantong RubberPlastic | Qingdao Foods vs. King Strong New Material | Qingdao Foods vs. Cangzhou Mingzhu Plastic | Qingdao Foods vs. Tonghua Grape Wine |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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