Correlation Between Jiahe Foods and Bank of China
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By analyzing existing cross correlation between Jiahe Foods Industry and Bank of China, you can compare the effects of market volatilities on Jiahe Foods and Bank of China 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 Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiahe Foods and Bank of China.
Diversification Opportunities for Jiahe Foods and Bank of China
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiahe and Bank is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jiahe Foods Industry and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China 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 Bank of China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of China has no effect on the direction of Jiahe Foods i.e., Jiahe Foods and Bank of China go up and down completely randomly.
Pair Corralation between Jiahe Foods and Bank of China
Assuming the 90 days trading horizon Jiahe Foods Industry is expected to generate 5.88 times more return on investment than Bank of China. However, Jiahe Foods is 5.88 times more volatile than Bank of China. It trades about 0.08 of its potential returns per unit of risk. Bank of China is currently generating about 0.31 per unit of risk. If you would invest 1,257 in Jiahe Foods Industry on September 20, 2024 and sell it today you would earn a total of 85.00 from holding Jiahe Foods Industry or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiahe Foods Industry vs. Bank of China
Performance |
| Timeline |
| Jiahe Foods Industry |
| Bank of China |
Jiahe Foods and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiahe Foods and Bank of China
The main advantage of trading using opposite Jiahe Foods and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiahe Foods position performs unexpectedly, Bank of China 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 Bank of China will offset losses from the drop in Bank of China'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 |
| Bank of China vs. Eastroc Beverage Group | Bank of China vs. Jiahe Foods Industry | Bank of China vs. Inly Media Co | Bank of China vs. Duzhe Publishing Media |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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