Correlation Between Jinling Hotel and Chongqing Brewery
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By analyzing existing cross correlation between Jinling Hotel Corp and Chongqing Brewery Co, you can compare the effects of market volatilities on Jinling Hotel and Chongqing Brewery 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 Jinling Hotel with a short position of Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinling Hotel and Chongqing Brewery.
Diversification Opportunities for Jinling Hotel and Chongqing Brewery
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jinling and Chongqing is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Jinling Hotel Corp and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery and Jinling Hotel 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 Jinling Hotel Corp are associated (or correlated) with Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Jinling Hotel i.e., Jinling Hotel and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Jinling Hotel and Chongqing Brewery
Assuming the 90 days trading horizon Jinling Hotel Corp is expected to generate 0.88 times more return on investment than Chongqing Brewery. However, Jinling Hotel Corp is 1.14 times less risky than Chongqing Brewery. It trades about 0.02 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about -0.04 per unit of risk. If you would invest 710.00 in Jinling Hotel Corp on September 3, 2024 and sell it today you would earn a total of 17.00 from holding Jinling Hotel Corp or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinling Hotel Corp vs. Chongqing Brewery Co
Performance |
| Timeline |
| Jinling Hotel Corp |
| Chongqing Brewery |
Jinling Hotel and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinling Hotel and Chongqing Brewery
The main advantage of trading using opposite Jinling Hotel and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinling Hotel position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's long position.| Jinling Hotel vs. King Strong New Material | Jinling Hotel vs. Kangxin New Materials | Jinling Hotel vs. Orinko Advanced Plastics | Jinling Hotel vs. Xizi Clean Energy |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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