Correlation Between Jinhe Biotechnology and Zhongrun Resources
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By analyzing existing cross correlation between Jinhe Biotechnology Co and Zhongrun Resources Investment, you can compare the effects of market volatilities on Jinhe Biotechnology and Zhongrun Resources 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 Jinhe Biotechnology with a short position of Zhongrun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and Zhongrun Resources.
Diversification Opportunities for Jinhe Biotechnology and Zhongrun Resources
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jinhe and Zhongrun is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co and Zhongrun Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongrun Resources and Jinhe Biotechnology 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 Jinhe Biotechnology Co are associated (or correlated) with Zhongrun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongrun Resources has no effect on the direction of Jinhe Biotechnology i.e., Jinhe Biotechnology and Zhongrun Resources go up and down completely randomly.
Pair Corralation between Jinhe Biotechnology and Zhongrun Resources
Assuming the 90 days trading horizon Jinhe Biotechnology Co is expected to under-perform the Zhongrun Resources. But the stock apears to be less risky and, when comparing its historical volatility, Jinhe Biotechnology Co is 1.22 times less risky than Zhongrun Resources. The stock trades about -0.04 of its potential returns per unit of risk. The Zhongrun Resources Investment is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 383.00 in Zhongrun Resources Investment on October 25, 2024 and sell it today you would earn a total of 30.00 from holding Zhongrun Resources Investment or generate 7.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhe Biotechnology Co vs. Zhongrun Resources Investment
Performance |
| Timeline |
| Jinhe Biotechnology |
| Zhongrun Resources |
Jinhe Biotechnology and Zhongrun Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhe Biotechnology and Zhongrun Resources
The main advantage of trading using opposite Jinhe Biotechnology and Zhongrun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhe Biotechnology position performs unexpectedly, Zhongrun Resources 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 Zhongrun Resources will offset losses from the drop in Zhongrun Resources' long position.The idea behind Jinhe Biotechnology Co and Zhongrun Resources Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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