Correlation Between Hsin Ba and Jinli Group
Can any of the company-specific risk be diversified away by investing in both Hsin Ba and Jinli Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hsin Ba and Jinli Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsin Ba Ba and Jinli Group Holdings, you can compare the effects of market volatilities on Hsin Ba and Jinli Group 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 Hsin Ba with a short position of Jinli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsin Ba and Jinli Group.
Diversification Opportunities for Hsin Ba and Jinli Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hsin and Jinli is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hsin Ba Ba and Jinli Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinli Group Holdings and Hsin Ba 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 Hsin Ba Ba are associated (or correlated) with Jinli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinli Group Holdings has no effect on the direction of Hsin Ba i.e., Hsin Ba and Jinli Group go up and down completely randomly.
Pair Corralation between Hsin Ba and Jinli Group
Assuming the 90 days trading horizon Hsin Ba Ba is expected to under-perform the Jinli Group. In addition to that, Hsin Ba is 1.03 times more volatile than Jinli Group Holdings. It trades about -0.2 of its total potential returns per unit of risk. Jinli Group Holdings is currently generating about 0.15 per unit of volatility. If you would invest 980.00 in Jinli Group Holdings on September 2, 2024 and sell it today you would earn a total of 310.00 from holding Jinli Group Holdings or generate 31.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hsin Ba Ba vs. Jinli Group Holdings
Performance |
| Timeline |
| Hsin Ba Ba |
| Jinli Group Holdings |
Hsin Ba and Jinli Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsin Ba and Jinli Group
The main advantage of trading using opposite Hsin Ba and Jinli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsin Ba position performs unexpectedly, Jinli Group 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 Jinli Group will offset losses from the drop in Jinli Group's long position.| Hsin Ba vs. Great China Metal | Hsin Ba vs. Ton Yi Industrial | Hsin Ba vs. Ching Feng Home | Hsin Ba vs. Choice Development |
| Jinli Group vs. Chaintech Technology Corp | Jinli Group vs. Avision | Jinli Group vs. Clevo Co | Jinli Group vs. Elitegroup Computer Systems |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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