Correlation Between Jinhui Liquor and Zhejiang Qianjiang
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By analyzing existing cross correlation between Jinhui Liquor Co and Zhejiang Qianjiang Motorcycle, you can compare the effects of market volatilities on Jinhui Liquor and Zhejiang Qianjiang 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 Jinhui Liquor with a short position of Zhejiang Qianjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhui Liquor and Zhejiang Qianjiang.
Diversification Opportunities for Jinhui Liquor and Zhejiang Qianjiang
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jinhui and Zhejiang is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Jinhui Liquor Co and Zhejiang Qianjiang Motorcycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Qianjiang and Jinhui Liquor 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 Jinhui Liquor Co are associated (or correlated) with Zhejiang Qianjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Qianjiang has no effect on the direction of Jinhui Liquor i.e., Jinhui Liquor and Zhejiang Qianjiang go up and down completely randomly.
Pair Corralation between Jinhui Liquor and Zhejiang Qianjiang
Assuming the 90 days trading horizon Jinhui Liquor Co is expected to under-perform the Zhejiang Qianjiang. But the stock apears to be less risky and, when comparing its historical volatility, Jinhui Liquor Co is 1.27 times less risky than Zhejiang Qianjiang. The stock trades about -0.01 of its potential returns per unit of risk. The Zhejiang Qianjiang Motorcycle is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,816 in Zhejiang Qianjiang Motorcycle on September 4, 2024 and sell it today you would lose (110.00) from holding Zhejiang Qianjiang Motorcycle or give up 6.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhui Liquor Co vs. Zhejiang Qianjiang Motorcycle
Performance |
| Timeline |
| Jinhui Liquor |
| Zhejiang Qianjiang |
Jinhui Liquor and Zhejiang Qianjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhui Liquor and Zhejiang Qianjiang
The main advantage of trading using opposite Jinhui Liquor and Zhejiang Qianjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhui Liquor position performs unexpectedly, Zhejiang Qianjiang 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 Zhejiang Qianjiang will offset losses from the drop in Zhejiang Qianjiang's long position.| Jinhui Liquor vs. Industrial and Commercial | Jinhui Liquor vs. Agricultural Bank of | Jinhui Liquor vs. China Construction Bank | Jinhui Liquor vs. Bank of China |
| Zhejiang Qianjiang vs. Bank of China | Zhejiang Qianjiang vs. Kweichow Moutai Co | Zhejiang Qianjiang vs. PetroChina Co Ltd | Zhejiang Qianjiang vs. Bank of Communications |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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