Correlation Between Jinhe Biotechnology and Lotus Health
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By analyzing existing cross correlation between Jinhe Biotechnology Co and Lotus Health Group, you can compare the effects of market volatilities on Jinhe Biotechnology and Lotus Health 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 Jinhe Biotechnology with a short position of Lotus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and Lotus Health.
Diversification Opportunities for Jinhe Biotechnology and Lotus Health
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jinhe and Lotus is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co and Lotus Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Health Group and Jinhe Biotechnology 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 Jinhe Biotechnology Co are associated (or correlated) with Lotus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Health Group has no effect on the direction of Jinhe Biotechnology i.e., Jinhe Biotechnology and Lotus Health go up and down completely randomly.
Pair Corralation between Jinhe Biotechnology and Lotus Health
Assuming the 90 days trading horizon Jinhe Biotechnology is expected to generate 9.09 times less return on investment than Lotus Health. But when comparing it to its historical volatility, Jinhe Biotechnology Co is 2.37 times less risky than Lotus Health. It trades about 0.03 of its potential returns per unit of risk. Lotus Health Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 474.00 in Lotus Health Group on December 25, 2024 and sell it today you would earn a total of 158.00 from holding Lotus Health Group or generate 33.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Jinhe Biotechnology Co vs. Lotus Health Group
Performance |
Timeline |
Jinhe Biotechnology |
Lotus Health Group |
Jinhe Biotechnology and Lotus Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jinhe Biotechnology and Lotus Health
The main advantage of trading using opposite Jinhe Biotechnology and Lotus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhe Biotechnology position performs unexpectedly, Lotus Health 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 Lotus Health will offset losses from the drop in Lotus Health's long position.The idea behind Jinhe Biotechnology Co and Lotus Health Group 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 CEOs Directory module to screen CEOs from public companies around the world.
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