Correlation Between Jinhe Biotechnology and Jiangsu Yueda
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By analyzing existing cross correlation between Jinhe Biotechnology Co and Jiangsu Yueda Investment, you can compare the effects of market volatilities on Jinhe Biotechnology and Jiangsu Yueda 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 Jiangsu Yueda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and Jiangsu Yueda.
Diversification Opportunities for Jinhe Biotechnology and Jiangsu Yueda
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jinhe and Jiangsu is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co and Jiangsu Yueda Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Yueda Investment 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 Jiangsu Yueda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Yueda Investment has no effect on the direction of Jinhe Biotechnology i.e., Jinhe Biotechnology and Jiangsu Yueda go up and down completely randomly.
Pair Corralation between Jinhe Biotechnology and Jiangsu Yueda
Assuming the 90 days trading horizon Jinhe Biotechnology Co is expected to generate 0.96 times more return on investment than Jiangsu Yueda. However, Jinhe Biotechnology Co is 1.04 times less risky than Jiangsu Yueda. It trades about 0.03 of its potential returns per unit of risk. Jiangsu Yueda Investment is currently generating about 0.02 per unit of risk. If you would invest 389.00 in Jinhe Biotechnology Co on October 25, 2024 and sell it today you would earn a total of 47.00 from holding Jinhe Biotechnology Co or generate 12.08% 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. Jiangsu Yueda Investment
Performance |
| Timeline |
| Jinhe Biotechnology |
| Jiangsu Yueda Investment |
Jinhe Biotechnology and Jiangsu Yueda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhe Biotechnology and Jiangsu Yueda
The main advantage of trading using opposite Jinhe Biotechnology and Jiangsu Yueda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhe Biotechnology position performs unexpectedly, Jiangsu Yueda 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 Jiangsu Yueda will offset losses from the drop in Jiangsu Yueda's long position.The idea behind Jinhe Biotechnology Co and Jiangsu Yueda Investment 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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