Correlation Between Aba Chemicals and Jinhe Biotechnology
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By analyzing existing cross correlation between Aba Chemicals Corp and Jinhe Biotechnology Co, you can compare the effects of market volatilities on Aba Chemicals and Jinhe Biotechnology 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 Aba Chemicals with a short position of Jinhe Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Jinhe Biotechnology.
Diversification Opportunities for Aba Chemicals and Jinhe Biotechnology
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aba and Jinhe is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Jinhe Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhe Biotechnology and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Jinhe Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhe Biotechnology has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Jinhe Biotechnology go up and down completely randomly.
Pair Corralation between Aba Chemicals and Jinhe Biotechnology
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to generate 1.67 times more return on investment than Jinhe Biotechnology. However, Aba Chemicals is 1.67 times more volatile than Jinhe Biotechnology Co. It trades about 0.02 of its potential returns per unit of risk. Jinhe Biotechnology Co is currently generating about 0.01 per unit of risk. If you would invest 788.00 in Aba Chemicals Corp on September 4, 2024 and sell it today you would earn a total of 29.00 from holding Aba Chemicals Corp or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Jinhe Biotechnology Co
Performance |
| Timeline |
| Aba Chemicals Corp |
| Jinhe Biotechnology |
Aba Chemicals and Jinhe Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Jinhe Biotechnology
The main advantage of trading using opposite Aba Chemicals and Jinhe Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Jinhe Biotechnology 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 Jinhe Biotechnology will offset losses from the drop in Jinhe Biotechnology's long position.| Aba Chemicals vs. Shenzhen Bioeasy Biotechnology | Aba Chemicals vs. Shenzhen Noposion Agrochemicals | Aba Chemicals vs. Dymatic Chemicals | Aba Chemicals vs. North Huajin Chemical |
| Jinhe Biotechnology vs. Sichuan Fulin Transportation | Jinhe Biotechnology vs. Fujian Longzhou Transportation | Jinhe Biotechnology vs. Hunan TV Broadcast | Jinhe Biotechnology vs. Spring Airlines Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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