Correlation Between HeBei Jinniu and New China
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By analyzing existing cross correlation between HeBei Jinniu Chemical and New China Life, you can compare the effects of market volatilities on HeBei Jinniu and New China 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 New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of HeBei Jinniu and New China.
Diversification Opportunities for HeBei Jinniu and New China
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HeBei and New is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding HeBei Jinniu Chemical and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life 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 New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of HeBei Jinniu i.e., HeBei Jinniu and New China go up and down completely randomly.
Pair Corralation between HeBei Jinniu and New China
Assuming the 90 days trading horizon HeBei Jinniu is expected to generate 2.58 times less return on investment than New China. But when comparing it to its historical volatility, HeBei Jinniu Chemical is 1.01 times less risky than New China. It trades about 0.03 of its potential returns per unit of risk. New China Life is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,797 in New China Life on September 12, 2024 and sell it today you would earn a total of 2,525 from holding New China Life or generate 90.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HeBei Jinniu Chemical vs. New China Life
Performance |
| Timeline |
| HeBei Jinniu Chemical |
| New China Life |
HeBei Jinniu and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HeBei Jinniu and New China
The main advantage of trading using opposite HeBei Jinniu and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeBei Jinniu position performs unexpectedly, New China 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 New China will offset losses from the drop in New China's long position.| HeBei Jinniu vs. Zijin Mining Group | HeBei Jinniu vs. Wanhua Chemical Group | HeBei Jinniu vs. Baoshan Iron Steel | HeBei Jinniu vs. Rongsheng Petrochemical Co |
| New China vs. HeBei Jinniu Chemical | New China vs. Zhejiang Construction Investment | New China vs. Lianhe Chemical Technology | New China vs. Nuode Investment 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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