Correlation Between Jinhe Biotechnology and Hangzhou Minsheng

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Can any of the company-specific risk be diversified away by investing in both Jinhe Biotechnology and Hangzhou Minsheng at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jinhe Biotechnology and Hangzhou Minsheng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jinhe Biotechnology Co and Hangzhou Minsheng Healthcare, you can compare the effects of market volatilities on Jinhe Biotechnology and Hangzhou Minsheng 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 Hangzhou Minsheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and Hangzhou Minsheng.

Diversification Opportunities for Jinhe Biotechnology and Hangzhou Minsheng

JinheHangzhouDiversified AwayJinheHangzhouDiversified Away100%
0.72
  Correlation Coefficient

Poor diversification

The 3 months correlation between Jinhe and Hangzhou is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co and Hangzhou Minsheng Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Minsheng 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 Hangzhou Minsheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Minsheng has no effect on the direction of Jinhe Biotechnology i.e., Jinhe Biotechnology and Hangzhou Minsheng go up and down completely randomly.

Pair Corralation between Jinhe Biotechnology and Hangzhou Minsheng

Assuming the 90 days trading horizon Jinhe Biotechnology Co is expected to generate 0.64 times more return on investment than Hangzhou Minsheng. However, Jinhe Biotechnology Co is 1.57 times less risky than Hangzhou Minsheng. It trades about -0.01 of its potential returns per unit of risk. Hangzhou Minsheng Healthcare is currently generating about -0.07 per unit of risk. If you would invest  531.00  in Jinhe Biotechnology Co on October 31, 2024 and sell it today you would lose (95.00) from holding Jinhe Biotechnology Co or give up 17.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy70.48%
ValuesDaily Returns

Jinhe Biotechnology Co  vs.  Hangzhou Minsheng Healthcare

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -15-10-50510
JavaScript chart by amCharts 3.21.15002688 301507
       Timeline  
Jinhe Biotechnology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Jinhe Biotechnology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jinhe Biotechnology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanJan44.24.44.64.85
Hangzhou Minsheng 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hangzhou Minsheng Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15DecJanJan11.51212.51313.51414.5

Jinhe Biotechnology and Hangzhou Minsheng Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.98-5.97-3.97-1.970.01.973.985.997.99 0.020.040.060.08
JavaScript chart by amCharts 3.21.15002688 301507
       Returns  

Pair Trading with Jinhe Biotechnology and Hangzhou Minsheng

The main advantage of trading using opposite Jinhe Biotechnology and Hangzhou Minsheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhe Biotechnology position performs unexpectedly, Hangzhou Minsheng 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 Hangzhou Minsheng will offset losses from the drop in Hangzhou Minsheng's long position.
The idea behind Jinhe Biotechnology Co and Hangzhou Minsheng Healthcare 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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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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