Correlation Between Jinhui Liquor and Weihai Honglin
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By analyzing existing cross correlation between Jinhui Liquor Co and Weihai Honglin Electronic, you can compare the effects of market volatilities on Jinhui Liquor and Weihai Honglin 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 Weihai Honglin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhui Liquor and Weihai Honglin.
Diversification Opportunities for Jinhui Liquor and Weihai Honglin
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jinhui and Weihai is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jinhui Liquor Co and Weihai Honglin Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weihai Honglin Electronic 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 Weihai Honglin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weihai Honglin Electronic has no effect on the direction of Jinhui Liquor i.e., Jinhui Liquor and Weihai Honglin go up and down completely randomly.
Pair Corralation between Jinhui Liquor and Weihai Honglin
Assuming the 90 days trading horizon Jinhui Liquor Co is expected to under-perform the Weihai Honglin. But the stock apears to be less risky and, when comparing its historical volatility, Jinhui Liquor Co is 2.27 times less risky than Weihai Honglin. The stock trades about -0.22 of its potential returns per unit of risk. The Weihai Honglin Electronic is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,369 in Weihai Honglin Electronic on October 30, 2024 and sell it today you would earn a total of 238.00 from holding Weihai Honglin Electronic or generate 17.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhui Liquor Co vs. Weihai Honglin Electronic
Performance |
| Timeline |
| Jinhui Liquor |
| Weihai Honglin Electronic |
Jinhui Liquor and Weihai Honglin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhui Liquor and Weihai Honglin
The main advantage of trading using opposite Jinhui Liquor and Weihai Honglin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhui Liquor position performs unexpectedly, Weihai Honglin 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 Weihai Honglin will offset losses from the drop in Weihai Honglin's long position.| Jinhui Liquor vs. Xinjiang Beixin RoadBridge | Jinhui Liquor vs. Guangdong Transtek Medical | Jinhui Liquor vs. Road Environment Technology | Jinhui Liquor vs. Shaanxi Broadcast TV |
| Weihai Honglin vs. Anhui Transport Consulting | Weihai Honglin vs. Duzhe Publishing Media | Weihai Honglin vs. ZYF Lopsking Aluminum | Weihai Honglin vs. Sino Platinum Metals Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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