Correlation Between Jiahe Foods and Nanhua Bio
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By analyzing existing cross correlation between Jiahe Foods Industry and Nanhua Bio Medicine, you can compare the effects of market volatilities on Jiahe Foods and Nanhua Bio 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 Jiahe Foods with a short position of Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiahe Foods and Nanhua Bio.
Diversification Opportunities for Jiahe Foods and Nanhua Bio
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiahe and Nanhua is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jiahe Foods Industry and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine and Jiahe Foods 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 Jiahe Foods Industry are associated (or correlated) with Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of Jiahe Foods i.e., Jiahe Foods and Nanhua Bio go up and down completely randomly.
Pair Corralation between Jiahe Foods and Nanhua Bio
Assuming the 90 days trading horizon Jiahe Foods is expected to generate 4.1 times less return on investment than Nanhua Bio. But when comparing it to its historical volatility, Jiahe Foods Industry is 1.43 times less risky than Nanhua Bio. It trades about 0.0 of its potential returns per unit of risk. Nanhua Bio Medicine is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,202 in Nanhua Bio Medicine on September 14, 2024 and sell it today you would lose (147.00) from holding Nanhua Bio Medicine or give up 12.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiahe Foods Industry vs. Nanhua Bio Medicine
Performance |
| Timeline |
| Jiahe Foods Industry |
| Nanhua Bio Medicine |
Jiahe Foods and Nanhua Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiahe Foods and Nanhua Bio
The main advantage of trading using opposite Jiahe Foods and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiahe Foods position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.| Jiahe Foods vs. Nanjing Putian Telecommunications | Jiahe Foods vs. Tianjin Realty Development | Jiahe Foods vs. Kangyue Technology Co | Jiahe Foods vs. Shenzhen Hifuture Electric |
| Nanhua Bio vs. Jiahe Foods Industry | Nanhua Bio vs. Anji Foodstuff Co | Nanhua Bio vs. Spring Airlines Co | Nanhua Bio vs. Shantou Wanshun Package |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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