Correlation Between Jiahe Foods and Dazhong Transportation
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By analyzing existing cross correlation between Jiahe Foods Industry and Dazhong Transportation Group, you can compare the effects of market volatilities on Jiahe Foods and Dazhong Transportation 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 Dazhong Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiahe Foods and Dazhong Transportation.
Diversification Opportunities for Jiahe Foods and Dazhong Transportation
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jiahe and Dazhong is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Jiahe Foods Industry and Dazhong Transportation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dazhong Transportation 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 Dazhong Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dazhong Transportation has no effect on the direction of Jiahe Foods i.e., Jiahe Foods and Dazhong Transportation go up and down completely randomly.
Pair Corralation between Jiahe Foods and Dazhong Transportation
Assuming the 90 days trading horizon Jiahe Foods Industry is expected to under-perform the Dazhong Transportation. In addition to that, Jiahe Foods is 1.57 times more volatile than Dazhong Transportation Group. It trades about -0.28 of its total potential returns per unit of risk. Dazhong Transportation Group is currently generating about -0.35 per unit of volatility. If you would invest 26.00 in Dazhong Transportation Group on October 11, 2024 and sell it today you would lose (4.00) from holding Dazhong Transportation Group or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jiahe Foods Industry vs. Dazhong Transportation Group
Performance |
| Timeline |
| Jiahe Foods Industry |
| Dazhong Transportation |
Jiahe Foods and Dazhong Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiahe Foods and Dazhong Transportation
The main advantage of trading using opposite Jiahe Foods and Dazhong Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiahe Foods position performs unexpectedly, Dazhong Transportation 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 Dazhong Transportation will offset losses from the drop in Dazhong Transportation's long position.| Jiahe Foods vs. Wonders Information | Jiahe Foods vs. Guangdong Shenglu Telecommunication | Jiahe Foods vs. Dawning Information Industry | Jiahe Foods vs. TianJin 712 Communication |
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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