Correlation Between Jinhui Liquor and Guangzhou Haige
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By analyzing existing cross correlation between Jinhui Liquor Co and Guangzhou Haige Communications, you can compare the effects of market volatilities on Jinhui Liquor and Guangzhou Haige 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 Guangzhou Haige. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhui Liquor and Guangzhou Haige.
Diversification Opportunities for Jinhui Liquor and Guangzhou Haige
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jinhui and Guangzhou is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Jinhui Liquor Co and Guangzhou Haige Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haige Comm 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 Guangzhou Haige. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haige Comm has no effect on the direction of Jinhui Liquor i.e., Jinhui Liquor and Guangzhou Haige go up and down completely randomly.
Pair Corralation between Jinhui Liquor and Guangzhou Haige
Assuming the 90 days trading horizon Jinhui Liquor is expected to generate 2.17 times less return on investment than Guangzhou Haige. But when comparing it to its historical volatility, Jinhui Liquor Co is 1.24 times less risky than Guangzhou Haige. It trades about 0.1 of its potential returns per unit of risk. Guangzhou Haige Communications is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,131 in Guangzhou Haige Communications on September 1, 2024 and sell it today you would earn a total of 149.00 from holding Guangzhou Haige Communications or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhui Liquor Co vs. Guangzhou Haige Communications
Performance |
| Timeline |
| Jinhui Liquor |
| Guangzhou Haige Comm |
Jinhui Liquor and Guangzhou Haige Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhui Liquor and Guangzhou Haige
The main advantage of trading using opposite Jinhui Liquor and Guangzhou Haige positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhui Liquor position performs unexpectedly, Guangzhou Haige 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 Guangzhou Haige will offset losses from the drop in Guangzhou Haige's long position.| Jinhui Liquor vs. China Petroleum Chemical | Jinhui Liquor vs. PetroChina Co Ltd | Jinhui Liquor vs. China State Construction | Jinhui Liquor vs. China Railway Group |
| Guangzhou Haige vs. Industrial and Commercial | Guangzhou Haige vs. Kweichow Moutai Co | Guangzhou Haige vs. Agricultural Bank of | Guangzhou Haige vs. China Mobile Limited |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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