Correlation Between Heilongjiang Publishing and HaiXin Foods
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By analyzing existing cross correlation between Heilongjiang Publishing Media and HaiXin Foods Co, you can compare the effects of market volatilities on Heilongjiang Publishing and HaiXin Foods 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 Heilongjiang Publishing with a short position of HaiXin Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heilongjiang Publishing and HaiXin Foods.
Diversification Opportunities for Heilongjiang Publishing and HaiXin Foods
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Heilongjiang and HaiXin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Heilongjiang Publishing Media and HaiXin Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HaiXin Foods and Heilongjiang Publishing 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 Heilongjiang Publishing Media are associated (or correlated) with HaiXin Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HaiXin Foods has no effect on the direction of Heilongjiang Publishing i.e., Heilongjiang Publishing and HaiXin Foods go up and down completely randomly.
Pair Corralation between Heilongjiang Publishing and HaiXin Foods
Assuming the 90 days trading horizon Heilongjiang Publishing is expected to generate 1.97 times less return on investment than HaiXin Foods. In addition to that, Heilongjiang Publishing is 1.24 times more volatile than HaiXin Foods Co. It trades about 0.11 of its total potential returns per unit of risk. HaiXin Foods Co is currently generating about 0.27 per unit of volatility. If you would invest 445.00 in HaiXin Foods Co on September 12, 2024 and sell it today you would earn a total of 91.00 from holding HaiXin Foods Co or generate 20.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heilongjiang Publishing Media vs. HaiXin Foods Co
Performance |
| Timeline |
| Heilongjiang Publishing |
| HaiXin Foods |
Heilongjiang Publishing and HaiXin Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heilongjiang Publishing and HaiXin Foods
The main advantage of trading using opposite Heilongjiang Publishing and HaiXin Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heilongjiang Publishing position performs unexpectedly, HaiXin Foods 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 HaiXin Foods will offset losses from the drop in HaiXin Foods' long position.The idea behind Heilongjiang Publishing Media and HaiXin Foods Co 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.
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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