Correlation Between Sichuan Jinshi and Qingdao Foods
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By analyzing existing cross correlation between Sichuan Jinshi Technology and Qingdao Foods Co, you can compare the effects of market volatilities on Sichuan Jinshi and Qingdao Foods 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 Sichuan Jinshi with a short position of Qingdao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Jinshi and Qingdao Foods.
Diversification Opportunities for Sichuan Jinshi and Qingdao Foods
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Qingdao is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Jinshi Technology and Qingdao Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Foods and Sichuan Jinshi 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 Sichuan Jinshi Technology are associated (or correlated) with Qingdao Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Foods has no effect on the direction of Sichuan Jinshi i.e., Sichuan Jinshi and Qingdao Foods go up and down completely randomly.
Pair Corralation between Sichuan Jinshi and Qingdao Foods
Assuming the 90 days trading horizon Sichuan Jinshi Technology is expected to generate 1.12 times more return on investment than Qingdao Foods. However, Sichuan Jinshi is 1.12 times more volatile than Qingdao Foods Co. It trades about -0.2 of its potential returns per unit of risk. Qingdao Foods Co is currently generating about -0.41 per unit of risk. If you would invest 747.00 in Sichuan Jinshi Technology on October 14, 2024 and sell it today you would lose (82.00) from holding Sichuan Jinshi Technology or give up 10.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Jinshi Technology vs. Qingdao Foods Co
Performance |
| Timeline |
| Sichuan Jinshi Technology |
| Qingdao Foods |
Sichuan Jinshi and Qingdao Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Jinshi and Qingdao Foods
The main advantage of trading using opposite Sichuan Jinshi and Qingdao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Jinshi position performs unexpectedly, Qingdao Foods 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 Qingdao Foods will offset losses from the drop in Qingdao Foods' long position.| Sichuan Jinshi vs. Jinxiandai Information Industry | Sichuan Jinshi vs. Sublime China Information | Sichuan Jinshi vs. Digital China Information | Sichuan Jinshi vs. Soochow Suzhou Industrial |
| Qingdao Foods vs. Chongqing Brewery Co | Qingdao Foods vs. China Aluminum International | Qingdao Foods vs. Shanghai Yanpu Metal | Qingdao Foods vs. Bomesc Offshore Engineering |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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