Correlation Between Shandong Longquan and Jiahe Foods
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By analyzing existing cross correlation between Shandong Longquan Pipeline and Jiahe Foods Industry, you can compare the effects of market volatilities on Shandong Longquan and Jiahe Foods 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 Shandong Longquan with a short position of Jiahe Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and Jiahe Foods.
Diversification Opportunities for Shandong Longquan and Jiahe Foods
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Jiahe is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and Jiahe Foods Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiahe Foods Industry and Shandong Longquan 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 Shandong Longquan Pipeline are associated (or correlated) with Jiahe Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiahe Foods Industry has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and Jiahe Foods go up and down completely randomly.
Pair Corralation between Shandong Longquan and Jiahe Foods
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 0.64 times more return on investment than Jiahe Foods. However, Shandong Longquan Pipeline is 1.56 times less risky than Jiahe Foods. It trades about 0.12 of its potential returns per unit of risk. Jiahe Foods Industry is currently generating about -0.09 per unit of risk. If you would invest 466.00 in Shandong Longquan Pipeline on October 25, 2024 and sell it today you would earn a total of 21.00 from holding Shandong Longquan Pipeline or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Longquan Pipeline vs. Jiahe Foods Industry
Performance |
| Timeline |
| Shandong Longquan |
| Jiahe Foods Industry |
Shandong Longquan and Jiahe Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and Jiahe Foods
The main advantage of trading using opposite Shandong Longquan and Jiahe Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, Jiahe Foods 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 Jiahe Foods will offset losses from the drop in Jiahe Foods' long position.| Shandong Longquan vs. Zijin Mining Group | Shandong Longquan vs. Wanhua Chemical Group | Shandong Longquan vs. Baoshan Iron Steel | Shandong Longquan vs. Rongsheng Petrochemical Co |
| Jiahe Foods vs. Zhongrun Resources Investment | Jiahe Foods vs. ZYF Lopsking Aluminum | Jiahe Foods vs. China Asset Management | Jiahe Foods vs. Hefei Metalforming Mach |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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