Correlation Between JS Corrugating and HaiXin Foods

Can any of the company-specific risk be diversified away by investing in both JS Corrugating and HaiXin Foods 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 JS Corrugating and HaiXin Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JS Corrugating Machinery and HaiXin Foods Co, you can compare the effects of market volatilities on JS Corrugating 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 JS Corrugating with a short position of HaiXin Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Corrugating and HaiXin Foods.

Diversification Opportunities for JS Corrugating and HaiXin Foods

0.32

Correlation Coefficient

JS Corrugating  HaiXin Foods

Weak diversification

The 3 months correlation between 000821 and HaiXin is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding JS Corrugating Machinery and HaiXin Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HaiXin Foods and JS Corrugating 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 JS Corrugating Machinery 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 JS Corrugating i.e., JS Corrugating and HaiXin Foods go up and down completely randomly.

Pair Corralation between JS Corrugating and HaiXin Foods

Assuming the 90 days trading horizon JS Corrugating Machinery is expected to under-perform the HaiXin Foods. In addition to that, JS Corrugating is 1.05 times more volatile than HaiXin Foods Co. It trades about -0.02 of its total potential returns per unit of risk. HaiXin Foods Co is currently generating about -0.01 per unit of volatility. If you would invest  587.00  in HaiXin Foods Co on October 11, 2024 and sell it today you would lose (158.00) from holding HaiXin Foods Co or give up 26.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

JS Corrugating Machinery  vs.  HaiXin Foods Co

JS Corrugating Machinery

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JS Corrugating Machinery are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JS Corrugating may actually be approaching a critical reversion point that can send shares even higher in February 2025.

HaiXin Foods

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HaiXin Foods Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HaiXin Foods sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JS Corrugating and HaiXin Foods

The main advantage of trading using opposite JS Corrugating and HaiXin Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JS Corrugating 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 JS Corrugating Machinery 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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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 Stocks Directory module to find actively traded stocks across global markets.