Correlation Between China Merchants and Jiahe Foods
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By analyzing existing cross correlation between China Merchants Shekou and Jiahe Foods Industry, you can compare the effects of market volatilities on China Merchants and Jiahe 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 China Merchants with a short position of Jiahe Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Jiahe Foods.
Diversification Opportunities for China Merchants and Jiahe Foods
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Jiahe is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Jiahe Foods Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiahe Foods Industry and China Merchants 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 China Merchants Shekou are associated (or correlated) with Jiahe Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiahe Foods Industry has no effect on the direction of China Merchants i.e., China Merchants and Jiahe Foods go up and down completely randomly.
Pair Corralation between China Merchants and Jiahe Foods
Assuming the 90 days trading horizon China Merchants is expected to generate 1.34 times less return on investment than Jiahe Foods. But when comparing it to its historical volatility, China Merchants Shekou is 1.1 times less risky than Jiahe Foods. It trades about 0.15 of its potential returns per unit of risk. Jiahe Foods Industry is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,042 in Jiahe Foods Industry on September 12, 2024 and sell it today you would earn a total of 444.00 from holding Jiahe Foods Industry or generate 42.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China Merchants Shekou vs. Jiahe Foods Industry
Performance |
Timeline |
China Merchants Shekou |
Jiahe Foods Industry |
China Merchants and Jiahe Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Merchants and Jiahe Foods
The main advantage of trading using opposite China Merchants and Jiahe Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Jiahe 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 Jiahe Foods will offset losses from the drop in Jiahe Foods' long position.China Merchants vs. Chongqing Brewery Co | China Merchants vs. Duzhe Publishing Media | China Merchants vs. Chinese Universe Publishing | China Merchants vs. Zhejiang Publishing Media |
Jiahe Foods vs. China Petroleum Chemical | Jiahe Foods vs. PetroChina Co Ltd | Jiahe Foods vs. China State Construction | Jiahe Foods vs. China Railway Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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