Correlation Between Jinhe Biotechnology and Ningbo Jianan
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By analyzing existing cross correlation between Jinhe Biotechnology Co and Ningbo Jianan Electronics, you can compare the effects of market volatilities on Jinhe Biotechnology and Ningbo Jianan 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 Ningbo Jianan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and Ningbo Jianan.
Diversification Opportunities for Jinhe Biotechnology and Ningbo Jianan
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jinhe and Ningbo is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co and Ningbo Jianan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Jianan Electronics 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 Ningbo Jianan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Jianan Electronics has no effect on the direction of Jinhe Biotechnology i.e., Jinhe Biotechnology and Ningbo Jianan go up and down completely randomly.
Pair Corralation between Jinhe Biotechnology and Ningbo Jianan
Assuming the 90 days trading horizon Jinhe Biotechnology Co is expected to generate 0.55 times more return on investment than Ningbo Jianan. However, Jinhe Biotechnology Co is 1.82 times less risky than Ningbo Jianan. It trades about 0.2 of its potential returns per unit of risk. Ningbo Jianan Electronics is currently generating about 0.07 per unit of risk. If you would invest 449.00 in Jinhe Biotechnology Co on September 14, 2024 and sell it today you would earn a total of 36.00 from holding Jinhe Biotechnology Co or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhe Biotechnology Co vs. Ningbo Jianan Electronics
Performance |
| Timeline |
| Jinhe Biotechnology |
| Ningbo Jianan Electronics |
Jinhe Biotechnology and Ningbo Jianan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhe Biotechnology and Ningbo Jianan
The main advantage of trading using opposite Jinhe Biotechnology and Ningbo Jianan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhe Biotechnology position performs unexpectedly, Ningbo Jianan 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 Ningbo Jianan will offset losses from the drop in Ningbo Jianan's long position.The idea behind Jinhe Biotechnology Co and Ningbo Jianan Electronics 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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