Correlation Between Zhejiang Yinlun and Jiajia Food
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By analyzing existing cross correlation between Zhejiang Yinlun Machinery and Jiajia Food Group, you can compare the effects of market volatilities on Zhejiang Yinlun and Jiajia Food 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 Zhejiang Yinlun with a short position of Jiajia Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Yinlun and Jiajia Food.
Diversification Opportunities for Zhejiang Yinlun and Jiajia Food
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zhejiang and Jiajia is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Yinlun Machinery and Jiajia Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiajia Food Group and Zhejiang Yinlun 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 Zhejiang Yinlun Machinery are associated (or correlated) with Jiajia Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiajia Food Group has no effect on the direction of Zhejiang Yinlun i.e., Zhejiang Yinlun and Jiajia Food go up and down completely randomly.
Pair Corralation between Zhejiang Yinlun and Jiajia Food
Assuming the 90 days trading horizon Zhejiang Yinlun Machinery is expected to generate 1.35 times more return on investment than Jiajia Food. However, Zhejiang Yinlun is 1.35 times more volatile than Jiajia Food Group. It trades about 0.27 of its potential returns per unit of risk. Jiajia Food Group is currently generating about 0.19 per unit of risk. If you would invest 1,787 in Zhejiang Yinlun Machinery on November 7, 2024 and sell it today you would earn a total of 229.00 from holding Zhejiang Yinlun Machinery or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Yinlun Machinery vs. Jiajia Food Group
Performance |
| Timeline |
| Zhejiang Yinlun Machinery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Jiajia Food Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Zhejiang Yinlun and Jiajia Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Yinlun and Jiajia Food
The main advantage of trading using opposite Zhejiang Yinlun and Jiajia Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Yinlun position performs unexpectedly, Jiajia Food 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 Jiajia Food will offset losses from the drop in Jiajia Food's long position.The idea behind Zhejiang Yinlun Machinery and Jiajia Food Group 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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