Correlation Between Heilongjiang Transport and Jinhui Liquor
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By analyzing existing cross correlation between Heilongjiang Transport Development and Jinhui Liquor Co, you can compare the effects of market volatilities on Heilongjiang Transport and Jinhui Liquor 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 Heilongjiang Transport with a short position of Jinhui Liquor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Transport and Jinhui Liquor.
Diversification Opportunities for Heilongjiang Transport and Jinhui Liquor
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Heilongjiang and Jinhui is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Transport Develop and Jinhui Liquor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhui Liquor and Heilongjiang Transport 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 Heilongjiang Transport Development are associated (or correlated) with Jinhui Liquor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhui Liquor has no effect on the direction of Heilongjiang Transport i.e., Heilongjiang Transport and Jinhui Liquor go up and down completely randomly.
Pair Corralation between Heilongjiang Transport and Jinhui Liquor
Assuming the 90 days trading horizon Heilongjiang Transport Development is expected to generate 1.27 times more return on investment than Jinhui Liquor. However, Heilongjiang Transport is 1.27 times more volatile than Jinhui Liquor Co. It trades about 0.17 of its potential returns per unit of risk. Jinhui Liquor Co is currently generating about -0.11 per unit of risk. If you would invest 374.00 in Heilongjiang Transport Development on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Heilongjiang Transport Development or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Transport Develop vs. Jinhui Liquor Co
Performance |
| Timeline |
| Heilongjiang Transport |
| Jinhui Liquor |
Heilongjiang Transport and Jinhui Liquor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Transport and Jinhui Liquor
The main advantage of trading using opposite Heilongjiang Transport and Jinhui Liquor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Transport position performs unexpectedly, Jinhui Liquor 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 Jinhui Liquor will offset losses from the drop in Jinhui Liquor's long position.The idea behind Heilongjiang Transport Development and Jinhui Liquor 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.
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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