Correlation Between Jiajia Food and Chongqing Road
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By analyzing existing cross correlation between Jiajia Food Group and Chongqing Road Bridge, you can compare the effects of market volatilities on Jiajia Food and Chongqing Road 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 Jiajia Food with a short position of Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiajia Food and Chongqing Road.
Diversification Opportunities for Jiajia Food and Chongqing Road
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiajia and Chongqing is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jiajia Food Group and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge and Jiajia Food 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 Jiajia Food Group are associated (or correlated) with Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Jiajia Food i.e., Jiajia Food and Chongqing Road go up and down completely randomly.
Pair Corralation between Jiajia Food and Chongqing Road
Assuming the 90 days trading horizon Jiajia Food is expected to generate 1.38 times less return on investment than Chongqing Road. But when comparing it to its historical volatility, Jiajia Food Group is 1.04 times less risky than Chongqing Road. It trades about 0.04 of its potential returns per unit of risk. Chongqing Road Bridge is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 469.00 in Chongqing Road Bridge on September 4, 2024 and sell it today you would earn a total of 213.00 from holding Chongqing Road Bridge or generate 45.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiajia Food Group vs. Chongqing Road Bridge
Performance |
| Timeline |
| Jiajia Food Group |
| Chongqing Road Bridge |
Jiajia Food and Chongqing Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiajia Food and Chongqing Road
The main advantage of trading using opposite Jiajia Food and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiajia Food position performs unexpectedly, Chongqing Road 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 Chongqing Road will offset losses from the drop in Chongqing Road's long position.| Jiajia Food vs. Poly Real Estate | Jiajia Food vs. China Vanke Co | Jiajia Food vs. China Merchants Shekou | Jiajia Food vs. Huafa Industrial Co |
| Chongqing Road vs. Zhongtong Guomai Communication | Chongqing Road vs. XinJiang GuoTong Pipeline | Chongqing Road vs. Jiaozuo Wanfang Aluminum | Chongqing Road vs. Tongyu Communication |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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