Correlation Between Guangdong Wens and HeBei Jinniu
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and HeBei Jinniu Chemical, you can compare the effects of market volatilities on Guangdong Wens and HeBei Jinniu 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 Guangdong Wens with a short position of HeBei Jinniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and HeBei Jinniu.
Diversification Opportunities for Guangdong Wens and HeBei Jinniu
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangdong and HeBei is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff and HeBei Jinniu Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeBei Jinniu Chemical and Guangdong Wens 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 Guangdong Wens Foodstuff are associated (or correlated) with HeBei Jinniu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeBei Jinniu Chemical has no effect on the direction of Guangdong Wens i.e., Guangdong Wens and HeBei Jinniu go up and down completely randomly.
Pair Corralation between Guangdong Wens and HeBei Jinniu
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to under-perform the HeBei Jinniu. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Wens Foodstuff is 3.38 times less risky than HeBei Jinniu. The stock trades about -0.39 of its potential returns per unit of risk. The HeBei Jinniu Chemical is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 580.00 in HeBei Jinniu Chemical on October 12, 2024 and sell it today you would lose (55.00) from holding HeBei Jinniu Chemical or give up 9.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. HeBei Jinniu Chemical
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| HeBei Jinniu Chemical |
Guangdong Wens and HeBei Jinniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and HeBei Jinniu
The main advantage of trading using opposite Guangdong Wens and HeBei Jinniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens position performs unexpectedly, HeBei Jinniu 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 HeBei Jinniu will offset losses from the drop in HeBei Jinniu's long position.| Guangdong Wens vs. Anyang Iron Steel | Guangdong Wens vs. Penyao Environmental Protection | Guangdong Wens vs. Grandblue Environment Co | Guangdong Wens vs. Sichuan Teway Food |
| HeBei Jinniu vs. Zijin Mining Group | HeBei Jinniu vs. Wanhua Chemical Group | HeBei Jinniu vs. Baoshan Iron Steel | HeBei Jinniu vs. Shandong Gold Mining |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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