Correlation Between Jinhui Liquor and Guangzhou Haozhi
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By analyzing existing cross correlation between Jinhui Liquor Co and Guangzhou Haozhi Industrial, you can compare the effects of market volatilities on Jinhui Liquor and Guangzhou Haozhi 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 Haozhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhui Liquor and Guangzhou Haozhi.
Diversification Opportunities for Jinhui Liquor and Guangzhou Haozhi
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jinhui and Guangzhou is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jinhui Liquor Co and Guangzhou Haozhi Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haozhi Ind 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 Haozhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haozhi Ind has no effect on the direction of Jinhui Liquor i.e., Jinhui Liquor and Guangzhou Haozhi go up and down completely randomly.
Pair Corralation between Jinhui Liquor and Guangzhou Haozhi
Assuming the 90 days trading horizon Jinhui Liquor Co is expected to under-perform the Guangzhou Haozhi. But the stock apears to be less risky and, when comparing its historical volatility, Jinhui Liquor Co is 2.06 times less risky than Guangzhou Haozhi. The stock trades about -0.03 of its potential returns per unit of risk. The Guangzhou Haozhi Industrial is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 928.00 in Guangzhou Haozhi Industrial on November 7, 2024 and sell it today you would earn a total of 1,261 from holding Guangzhou Haozhi Industrial or generate 135.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhui Liquor Co vs. Guangzhou Haozhi Industrial
Performance |
| Timeline |
| Jinhui Liquor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangzhou Haozhi Ind |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Jinhui Liquor and Guangzhou Haozhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhui Liquor and Guangzhou Haozhi
The main advantage of trading using opposite Jinhui Liquor and Guangzhou Haozhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhui Liquor position performs unexpectedly, Guangzhou Haozhi 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 Haozhi will offset losses from the drop in Guangzhou Haozhi's long position.The idea behind Jinhui Liquor Co and Guangzhou Haozhi Industrial 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.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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