Correlation Between Guangdong Jingyi and Jinhui Liquor
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By analyzing existing cross correlation between Guangdong Jingyi Metal and Jinhui Liquor Co, you can compare the effects of market volatilities on Guangdong Jingyi and Jinhui Liquor 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 Guangdong Jingyi with a short position of Jinhui Liquor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and Jinhui Liquor.
Diversification Opportunities for Guangdong Jingyi and Jinhui Liquor
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and Jinhui is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and Jinhui Liquor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhui Liquor and Guangdong Jingyi 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 Guangdong Jingyi Metal are associated (or correlated) with Jinhui Liquor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhui Liquor has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and Jinhui Liquor go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and Jinhui Liquor
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to under-perform the Jinhui Liquor. In addition to that, Guangdong Jingyi is 1.92 times more volatile than Jinhui Liquor Co. It trades about -0.23 of its total potential returns per unit of risk. Jinhui Liquor Co is currently generating about -0.35 per unit of volatility. If you would invest 2,066 in Jinhui Liquor Co on October 11, 2024 and sell it today you would lose (248.00) from holding Jinhui Liquor Co or give up 12.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. Jinhui Liquor Co
Performance |
| Timeline |
| Guangdong Jingyi Metal |
| Jinhui Liquor |
Guangdong Jingyi and Jinhui Liquor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and Jinhui Liquor
The main advantage of trading using opposite Guangdong Jingyi and Jinhui Liquor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, Jinhui Liquor 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 Jinhui Liquor will offset losses from the drop in Jinhui Liquor's long position.| Guangdong Jingyi vs. Heren Health Co | Guangdong Jingyi vs. Jiugui Liquor Co | Guangdong Jingyi vs. Hangzhou Minsheng Healthcare | Guangdong Jingyi vs. Shandong Sinoglory Health |
| Jinhui Liquor vs. Sunny Loan Top | Jinhui Liquor vs. Xinxiang Chemical Fiber | Jinhui Liquor vs. Wuxi Chemical Equipment | Jinhui Liquor vs. Semiconductor Manufacturing Intl |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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