Correlation Between Jinsanjiang (Zhaoqing) and Jiahe Foods

Can any of the company-specific risk be diversified away by investing in both Jinsanjiang (Zhaoqing) and Jiahe 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 Jinsanjiang (Zhaoqing) and Jiahe Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jinsanjiang Silicon Material and Jiahe Foods Industry, you can compare the effects of market volatilities on Jinsanjiang (Zhaoqing) 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 Jinsanjiang (Zhaoqing) with a short position of Jiahe Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinsanjiang (Zhaoqing) and Jiahe Foods.

Diversification Opportunities for Jinsanjiang (Zhaoqing) and Jiahe Foods

0.2

Correlation Coefficient

Jinsanjiang (Zhaoqing)  Jiahe Foods

Modest diversification

The 3 months correlation between Jinsanjiang and Jiahe is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jinsanjiang Silicon Material 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 Jinsanjiang (Zhaoqing) 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 Jinsanjiang Silicon Material 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 Jinsanjiang (Zhaoqing) i.e., Jinsanjiang (Zhaoqing) and Jiahe Foods go up and down completely randomly.

Pair Corralation between Jinsanjiang (Zhaoqing) and Jiahe Foods

Assuming the 90 days trading horizon Jinsanjiang (Zhaoqing) is expected to generate 10.15 times less return on investment than Jiahe Foods. But when comparing it to its historical volatility, Jinsanjiang Silicon Material is 1.23 times less risky than Jiahe Foods. It trades about 0.0 of its potential returns per unit of risk. Jiahe Foods Industry is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,367  in Jiahe Foods Industry on December 26, 2024 and sell it today you would earn a total of  28.00  from holding Jiahe Foods Industry or generate 2.05% return on investment over 90 days.

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

Jinsanjiang Silicon Material  vs.  Jiahe Foods Industry

Jinsanjiang (Zhaoqing)

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jinsanjiang Silicon Material has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jinsanjiang (Zhaoqing) is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jiahe Foods Industry

Risk-Adjusted Performance

Weak

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

Pair Trading with Jinsanjiang (Zhaoqing) and Jiahe Foods

The main advantage of trading using opposite Jinsanjiang (Zhaoqing) and Jiahe Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinsanjiang (Zhaoqing) 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.

The idea behind Jinsanjiang Silicon Material and Jiahe Foods Industry 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.