Correlation Between Jiajia Food and Hengdian Entertainment
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By analyzing existing cross correlation between Jiajia Food Group and Hengdian Entertainment Co, you can compare the effects of market volatilities on Jiajia Food and Hengdian Entertainment 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 Hengdian Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiajia Food and Hengdian Entertainment.
Diversification Opportunities for Jiajia Food and Hengdian Entertainment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiajia and Hengdian is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jiajia Food Group and Hengdian Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengdian Entertainment 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 Hengdian Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengdian Entertainment has no effect on the direction of Jiajia Food i.e., Jiajia Food and Hengdian Entertainment go up and down completely randomly.
Pair Corralation between Jiajia Food and Hengdian Entertainment
Assuming the 90 days trading horizon Jiajia Food Group is expected to generate 0.79 times more return on investment than Hengdian Entertainment. However, Jiajia Food Group is 1.27 times less risky than Hengdian Entertainment. It trades about -0.3 of its potential returns per unit of risk. Hengdian Entertainment Co is currently generating about -0.34 per unit of risk. If you would invest 542.00 in Jiajia Food Group on October 17, 2024 and sell it today you would lose (95.00) from holding Jiajia Food Group or give up 17.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiajia Food Group vs. Hengdian Entertainment Co
Performance |
| Timeline |
| Jiajia Food Group |
| Hengdian Entertainment |
Jiajia Food and Hengdian Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiajia Food and Hengdian Entertainment
The main advantage of trading using opposite Jiajia Food and Hengdian Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiajia Food position performs unexpectedly, Hengdian Entertainment 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 Hengdian Entertainment will offset losses from the drop in Hengdian Entertainment's long position.| Jiajia Food vs. Orinko Advanced Plastics | Jiajia Food vs. Chongqing Sulian Plastic | Jiajia Food vs. Ningxia Building Materials | Jiajia Food vs. Henan Shuanghui 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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