Correlation Between HeBei Jinniu and Xiwang Foodstuffs
Specify exactly 2 symbols:
By analyzing existing cross correlation between HeBei Jinniu Chemical and Xiwang Foodstuffs Co, you can compare the effects of market volatilities on HeBei Jinniu and Xiwang Foodstuffs 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 HeBei Jinniu with a short position of Xiwang Foodstuffs. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeBei Jinniu and Xiwang Foodstuffs.
Diversification Opportunities for HeBei Jinniu and Xiwang Foodstuffs
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HeBei and Xiwang is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding HeBei Jinniu Chemical and Xiwang Foodstuffs Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiwang Foodstuffs and HeBei Jinniu 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 HeBei Jinniu Chemical are associated (or correlated) with Xiwang Foodstuffs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiwang Foodstuffs has no effect on the direction of HeBei Jinniu i.e., HeBei Jinniu and Xiwang Foodstuffs go up and down completely randomly.
Pair Corralation between HeBei Jinniu and Xiwang Foodstuffs
Assuming the 90 days trading horizon HeBei Jinniu Chemical is expected to generate 0.86 times more return on investment than Xiwang Foodstuffs. However, HeBei Jinniu Chemical is 1.17 times less risky than Xiwang Foodstuffs. It trades about 0.02 of its potential returns per unit of risk. Xiwang Foodstuffs Co is currently generating about -0.03 per unit of risk. If you would invest 513.00 in HeBei Jinniu Chemical on November 7, 2024 and sell it today you would earn a total of 49.00 from holding HeBei Jinniu Chemical or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeBei Jinniu Chemical vs. Xiwang Foodstuffs Co
Performance |
| Timeline |
| HeBei Jinniu Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Xiwang Foodstuffs |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HeBei Jinniu and Xiwang Foodstuffs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeBei Jinniu and Xiwang Foodstuffs
The main advantage of trading using opposite HeBei Jinniu and Xiwang Foodstuffs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeBei Jinniu position performs unexpectedly, Xiwang Foodstuffs 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 Xiwang Foodstuffs will offset losses from the drop in Xiwang Foodstuffs' long position.The idea behind HeBei Jinniu Chemical and Xiwang Foodstuffs Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |