Correlation Between Jahen Household and Guangdong Electric
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By analyzing existing cross correlation between Jahen Household Products and Guangdong Electric Power, you can compare the effects of market volatilities on Jahen Household and Guangdong Electric 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 Jahen Household with a short position of Guangdong Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahen Household and Guangdong Electric.
Diversification Opportunities for Jahen Household and Guangdong Electric
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jahen and Guangdong is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Jahen Household Products and Guangdong Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Electric Power and Jahen Household 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 Jahen Household Products are associated (or correlated) with Guangdong Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Electric Power has no effect on the direction of Jahen Household i.e., Jahen Household and Guangdong Electric go up and down completely randomly.
Pair Corralation between Jahen Household and Guangdong Electric
Assuming the 90 days trading horizon Jahen Household Products is expected to generate 4.45 times more return on investment than Guangdong Electric. However, Jahen Household is 4.45 times more volatile than Guangdong Electric Power. It trades about 0.1 of its potential returns per unit of risk. Guangdong Electric Power is currently generating about 0.03 per unit of risk. If you would invest 1,184 in Jahen Household Products on November 23, 2024 and sell it today you would earn a total of 419.00 from holding Jahen Household Products or generate 35.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.97% |
Values | Daily Returns |
Jahen Household Products vs. Guangdong Electric Power
Performance |
Timeline |
Jahen Household Products |
Guangdong Electric Power |
Jahen Household and Guangdong Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jahen Household and Guangdong Electric
The main advantage of trading using opposite Jahen Household and Guangdong Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahen Household position performs unexpectedly, Guangdong Electric 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 Guangdong Electric will offset losses from the drop in Guangdong Electric's long position.Jahen Household vs. Harson Trading China | ||
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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