Correlation Between HaiXin Foods and Tonghua Grape
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By analyzing existing cross correlation between HaiXin Foods Co and Tonghua Grape Wine, you can compare the effects of market volatilities on HaiXin Foods and Tonghua Grape 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 HaiXin Foods with a short position of Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of HaiXin Foods and Tonghua Grape.
Diversification Opportunities for HaiXin Foods and Tonghua Grape
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HaiXin and Tonghua is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding HaiXin Foods Co and Tonghua Grape Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonghua Grape Wine and HaiXin Foods 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 HaiXin Foods Co are associated (or correlated) with Tonghua Grape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonghua Grape Wine has no effect on the direction of HaiXin Foods i.e., HaiXin Foods and Tonghua Grape go up and down completely randomly.
Pair Corralation between HaiXin Foods and Tonghua Grape
Assuming the 90 days trading horizon HaiXin Foods Co is expected to generate 1.82 times more return on investment than Tonghua Grape. However, HaiXin Foods is 1.82 times more volatile than Tonghua Grape Wine. It trades about 0.25 of its potential returns per unit of risk. Tonghua Grape Wine is currently generating about 0.12 per unit of risk. If you would invest 380.00 in HaiXin Foods Co on September 1, 2024 and sell it today you would earn a total of 81.00 from holding HaiXin Foods Co or generate 21.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HaiXin Foods Co vs. Tonghua Grape Wine
Performance |
| Timeline |
| HaiXin Foods |
| Tonghua Grape Wine |
HaiXin Foods and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HaiXin Foods and Tonghua Grape
The main advantage of trading using opposite HaiXin Foods and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HaiXin Foods position performs unexpectedly, Tonghua Grape 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 Tonghua Grape will offset losses from the drop in Tonghua Grape's long position.| HaiXin Foods vs. Nanjing Putian Telecommunications | HaiXin Foods vs. Shenzhen Hifuture Electric | HaiXin Foods vs. Tianjin Realty Development | HaiXin Foods vs. Shenyang Huitian Thermal |
| Tonghua Grape vs. China Petroleum Chemical | Tonghua Grape vs. PetroChina Co Ltd | Tonghua Grape vs. China State Construction | Tonghua Grape vs. China Railway Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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