Correlation Between Jinhe Biotechnology and Hengli Petrochemical
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By analyzing existing cross correlation between Jinhe Biotechnology Co and Hengli Petrochemical Co, you can compare the effects of market volatilities on Jinhe Biotechnology and Hengli Petrochemical 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 Hengli Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and Hengli Petrochemical.
Diversification Opportunities for Jinhe Biotechnology and Hengli Petrochemical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jinhe and Hengli is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co and Hengli Petrochemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Petrochemical 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 Hengli Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Petrochemical has no effect on the direction of Jinhe Biotechnology i.e., Jinhe Biotechnology and Hengli Petrochemical go up and down completely randomly.
Pair Corralation between Jinhe Biotechnology and Hengli Petrochemical
Assuming the 90 days trading horizon Jinhe Biotechnology is expected to generate 18.06 times less return on investment than Hengli Petrochemical. In addition to that, Jinhe Biotechnology is 1.99 times more volatile than Hengli Petrochemical Co. It trades about 0.01 of its total potential returns per unit of risk. Hengli Petrochemical Co is currently generating about 0.27 per unit of volatility. If you would invest 1,423 in Hengli Petrochemical Co on September 28, 2024 and sell it today you would earn a total of 103.00 from holding Hengli Petrochemical Co or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhe Biotechnology Co vs. Hengli Petrochemical Co
Performance |
| Timeline |
| Jinhe Biotechnology |
| Hengli Petrochemical |
Jinhe Biotechnology and Hengli Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhe Biotechnology and Hengli Petrochemical
The main advantage of trading using opposite Jinhe Biotechnology and Hengli Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhe Biotechnology position performs unexpectedly, Hengli Petrochemical 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 Hengli Petrochemical will offset losses from the drop in Hengli Petrochemical's long position.| Jinhe Biotechnology vs. Minmetals Capital Co | Jinhe Biotechnology vs. Shanghai Yanpu Metal | Jinhe Biotechnology vs. Guangdong Jingyi Metal | Jinhe Biotechnology vs. De Rucci Healthy |
| Hengli Petrochemical vs. Zijin Mining Group | Hengli Petrochemical vs. Wanhua Chemical Group | Hengli Petrochemical vs. Baoshan Iron Steel | Hengli Petrochemical vs. Shandong Gold Mining |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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