Correlation Between Ford and Jinhe Biotechnology
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By analyzing existing cross correlation between Ford Motor and Jinhe Biotechnology Co, you can compare the effects of market volatilities on Ford and Jinhe Biotechnology 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 Ford with a short position of Jinhe Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Jinhe Biotechnology.
Diversification Opportunities for Ford and Jinhe Biotechnology
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ford and Jinhe is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Jinhe Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhe Biotechnology and Ford 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 Ford Motor are associated (or correlated) with Jinhe Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhe Biotechnology has no effect on the direction of Ford i.e., Ford and Jinhe Biotechnology go up and down completely randomly.
Pair Corralation between Ford and Jinhe Biotechnology
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Jinhe Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Ford Motor is 1.23 times less risky than Jinhe Biotechnology. The stock trades about -0.01 of its potential returns per unit of risk. The Jinhe Biotechnology Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 360.00 in Jinhe Biotechnology Co on October 26, 2024 and sell it today you would earn a total of 73.00 from holding Jinhe Biotechnology Co or generate 20.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.37% |
| Values | Daily Returns |
Ford Motor vs. Jinhe Biotechnology Co
Performance |
| Timeline |
| Ford Motor |
| Jinhe Biotechnology |
Ford and Jinhe Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Jinhe Biotechnology
The main advantage of trading using opposite Ford and Jinhe Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Jinhe Biotechnology 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 Jinhe Biotechnology will offset losses from the drop in Jinhe Biotechnology's long position.The idea behind Ford Motor and Jinhe Biotechnology 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.| Jinhe Biotechnology vs. Beingmate Baby Child | Jinhe Biotechnology vs. FSPG Hi Tech Co | Jinhe Biotechnology vs. Zhejiang JIULI Hi tech | Jinhe Biotechnology vs. Heilongjiang Transport Development |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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