Correlation Between Juewei Food and Huadong Medicine
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By analyzing existing cross correlation between Juewei Food Co and Huadong Medicine Co, you can compare the effects of market volatilities on Juewei Food and Huadong Medicine 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 Juewei Food with a short position of Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juewei Food and Huadong Medicine.
Diversification Opportunities for Juewei Food and Huadong Medicine
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Juewei and Huadong is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Juewei Food Co and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine and Juewei Food 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 Juewei Food Co are associated (or correlated) with Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of Juewei Food i.e., Juewei Food and Huadong Medicine go up and down completely randomly.
Pair Corralation between Juewei Food and Huadong Medicine
Assuming the 90 days trading horizon Juewei Food Co is expected to under-perform the Huadong Medicine. In addition to that, Juewei Food is 2.01 times more volatile than Huadong Medicine Co. It trades about -0.01 of its total potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.02 per unit of volatility. If you would invest 3,381 in Huadong Medicine Co on October 14, 2024 and sell it today you would lose (118.00) from holding Huadong Medicine Co or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Juewei Food Co vs. Huadong Medicine Co
Performance |
| Timeline |
| Juewei Food |
| Huadong Medicine |
Juewei Food and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juewei Food and Huadong Medicine
The main advantage of trading using opposite Juewei Food and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juewei Food position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.| Juewei Food vs. Industrial and Commercial | Juewei Food vs. Agricultural Bank of | Juewei Food vs. China Construction Bank | Juewei Food vs. Bank of China |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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