Correlation Between Jinhe Biotechnology and China Aluminum
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By analyzing existing cross correlation between Jinhe Biotechnology Co and China Aluminum International, you can compare the effects of market volatilities on Jinhe Biotechnology and China Aluminum 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 China Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and China Aluminum.
Diversification Opportunities for Jinhe Biotechnology and China Aluminum
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jinhe and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co and China Aluminum International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aluminum Inter 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 China Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aluminum Inter has no effect on the direction of Jinhe Biotechnology i.e., Jinhe Biotechnology and China Aluminum go up and down completely randomly.
Pair Corralation between Jinhe Biotechnology and China Aluminum
Assuming the 90 days trading horizon Jinhe Biotechnology Co is expected to generate 2.45 times more return on investment than China Aluminum. However, Jinhe Biotechnology is 2.45 times more volatile than China Aluminum International. It trades about 0.09 of its potential returns per unit of risk. China Aluminum International is currently generating about 0.02 per unit of risk. If you would invest 419.00 in Jinhe Biotechnology Co on November 9, 2024 and sell it today you would earn a total of 17.00 from holding Jinhe Biotechnology Co or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhe Biotechnology Co vs. China Aluminum International
Performance |
| Timeline |
| Jinhe Biotechnology |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| China Aluminum Inter |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Jinhe Biotechnology and China Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhe Biotechnology and China Aluminum
The main advantage of trading using opposite Jinhe Biotechnology and China Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhe Biotechnology position performs unexpectedly, China Aluminum 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 China Aluminum will offset losses from the drop in China Aluminum's long position.The idea behind Jinhe Biotechnology Co and China Aluminum International 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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