Correlation Between Jiajia Food and Pengxin International
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By analyzing existing cross correlation between Jiajia Food Group and Pengxin International Mining, you can compare the effects of market volatilities on Jiajia Food and Pengxin International 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 Pengxin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiajia Food and Pengxin International.
Diversification Opportunities for Jiajia Food and Pengxin International
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiajia and Pengxin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jiajia Food Group and Pengxin International Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pengxin International 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 Pengxin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pengxin International has no effect on the direction of Jiajia Food i.e., Jiajia Food and Pengxin International go up and down completely randomly.
Pair Corralation between Jiajia Food and Pengxin International
Assuming the 90 days trading horizon Jiajia Food Group is expected to generate 1.16 times more return on investment than Pengxin International. However, Jiajia Food is 1.16 times more volatile than Pengxin International Mining. It trades about 0.22 of its potential returns per unit of risk. Pengxin International Mining is currently generating about 0.04 per unit of risk. If you would invest 188.00 in Jiajia Food Group on September 2, 2024 and sell it today you would earn a total of 277.00 from holding Jiajia Food Group or generate 147.34% 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. Pengxin International Mining
Performance |
| Timeline |
| Jiajia Food Group |
| Pengxin International |
Jiajia Food and Pengxin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiajia Food and Pengxin International
The main advantage of trading using opposite Jiajia Food and Pengxin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiajia Food position performs unexpectedly, Pengxin International 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 Pengxin International will offset losses from the drop in Pengxin International's long position.| Jiajia Food vs. Pengxin International Mining | Jiajia Food vs. Shandong Polymer Biochemicals | Jiajia Food vs. Industrial Securities Co | Jiajia Food vs. Shenzhen Shenbao Industrial |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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