Correlation Between Jia Jie and Hsinli Chemical
Can any of the company-specific risk be diversified away by investing in both Jia Jie and Hsinli Chemical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jia Jie and Hsinli Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jia Jie Biomedical and Hsinli Chemical Industrial, you can compare the effects of market volatilities on Jia Jie and Hsinli Chemical 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 Jia Jie with a short position of Hsinli Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jia Jie and Hsinli Chemical.
Diversification Opportunities for Jia Jie and Hsinli Chemical
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jia and Hsinli is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Jia Jie Biomedical and Hsinli Chemical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsinli Chemical Indu and Jia Jie 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 Jia Jie Biomedical are associated (or correlated) with Hsinli Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsinli Chemical Indu has no effect on the direction of Jia Jie i.e., Jia Jie and Hsinli Chemical go up and down completely randomly.
Pair Corralation between Jia Jie and Hsinli Chemical
Assuming the 90 days trading horizon Jia Jie Biomedical is expected to generate 1.78 times more return on investment than Hsinli Chemical. However, Jia Jie is 1.78 times more volatile than Hsinli Chemical Industrial. It trades about 0.11 of its potential returns per unit of risk. Hsinli Chemical Industrial is currently generating about 0.06 per unit of risk. If you would invest 2,270 in Jia Jie Biomedical on October 13, 2024 and sell it today you would earn a total of 165.00 from holding Jia Jie Biomedical or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jia Jie Biomedical vs. Hsinli Chemical Industrial
Performance |
| Timeline |
| Jia Jie Biomedical |
| Hsinli Chemical Indu |
Jia Jie and Hsinli Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jia Jie and Hsinli Chemical
The main advantage of trading using opposite Jia Jie and Hsinli Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jia Jie position performs unexpectedly, Hsinli Chemical 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 Hsinli Chemical will offset losses from the drop in Hsinli Chemical's long position.| Jia Jie vs. Mercuries Data Systems | Jia Jie vs. Asmedia Technology | Jia Jie vs. Microelectronics Technology | Jia Jie vs. ANJI Technology Co |
| Hsinli Chemical vs. Cowealth Medical Holding | Hsinli Chemical vs. Jia Jie Biomedical | Hsinli Chemical vs. SuperAlloy Industrial Co, | Hsinli Chemical vs. Energenesis Biomedical 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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