Correlation Between Jinhe Biotechnology and Empyrean Technology
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By analyzing existing cross correlation between Jinhe Biotechnology Co and Empyrean Technology Co, you can compare the effects of market volatilities on Jinhe Biotechnology and Empyrean Technology 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 Empyrean Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and Empyrean Technology.
Diversification Opportunities for Jinhe Biotechnology and Empyrean Technology
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jinhe and Empyrean is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co and Empyrean Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empyrean Technology 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 Empyrean Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empyrean Technology has no effect on the direction of Jinhe Biotechnology i.e., Jinhe Biotechnology and Empyrean Technology go up and down completely randomly.
Pair Corralation between Jinhe Biotechnology and Empyrean Technology
Assuming the 90 days trading horizon Jinhe Biotechnology is expected to generate 4.28 times less return on investment than Empyrean Technology. But when comparing it to its historical volatility, Jinhe Biotechnology Co is 1.42 times less risky than Empyrean Technology. It trades about 0.01 of its potential returns per unit of risk. Empyrean Technology Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,078 in Empyrean Technology Co on September 14, 2024 and sell it today you would earn a total of 2,761 from holding Empyrean Technology Co or generate 27.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhe Biotechnology Co vs. Empyrean Technology Co
Performance |
| Timeline |
| Jinhe Biotechnology |
| Empyrean Technology |
Jinhe Biotechnology and Empyrean Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhe Biotechnology and Empyrean Technology
The main advantage of trading using opposite Jinhe Biotechnology and Empyrean Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhe Biotechnology position performs unexpectedly, Empyrean Technology 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 Empyrean Technology will offset losses from the drop in Empyrean Technology's long position.The idea behind Jinhe Biotechnology Co and Empyrean Technology Co 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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