Correlation Between Jinhe Biotechnology and Jinsanjiang Silicon
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By analyzing existing cross correlation between Jinhe Biotechnology Co and Jinsanjiang Silicon Material, you can compare the effects of market volatilities on Jinhe Biotechnology and Jinsanjiang Silicon 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 Jinsanjiang Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and Jinsanjiang Silicon.
Diversification Opportunities for Jinhe Biotechnology and Jinsanjiang Silicon
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jinhe and Jinsanjiang is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co and Jinsanjiang Silicon Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinsanjiang Silicon 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 Jinsanjiang Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinsanjiang Silicon has no effect on the direction of Jinhe Biotechnology i.e., Jinhe Biotechnology and Jinsanjiang Silicon go up and down completely randomly.
Pair Corralation between Jinhe Biotechnology and Jinsanjiang Silicon
Assuming the 90 days trading horizon Jinhe Biotechnology Co is expected to under-perform the Jinsanjiang Silicon. But the stock apears to be less risky and, when comparing its historical volatility, Jinhe Biotechnology Co is 1.61 times less risky than Jinsanjiang Silicon. The stock trades about -0.01 of its potential returns per unit of risk. The Jinsanjiang Silicon Material is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,506 in Jinsanjiang Silicon Material on November 7, 2024 and sell it today you would lose (424.00) from holding Jinsanjiang Silicon Material or give up 28.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhe Biotechnology Co vs. Jinsanjiang Silicon Material
Performance |
| Timeline |
| Jinhe Biotechnology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jinsanjiang Silicon |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jinhe Biotechnology and Jinsanjiang Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhe Biotechnology and Jinsanjiang Silicon
The main advantage of trading using opposite Jinhe Biotechnology and Jinsanjiang Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhe Biotechnology position performs unexpectedly, Jinsanjiang Silicon 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 Jinsanjiang Silicon will offset losses from the drop in Jinsanjiang Silicon's long position.The idea behind Jinhe Biotechnology Co and Jinsanjiang Silicon Material 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.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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