Correlation Between Ji Haw and Allied Industrial
Can any of the company-specific risk be diversified away by investing in both Ji Haw and Allied Industrial 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 Ji Haw and Allied Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ji Haw Industrial Co and Allied Industrial, you can compare the effects of market volatilities on Ji Haw and Allied Industrial 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 Ji Haw with a short position of Allied Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ji Haw and Allied Industrial.
Diversification Opportunities for Ji Haw and Allied Industrial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 3011 and Allied is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ji Haw Industrial Co and Allied Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Industrial and Ji Haw 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 Ji Haw Industrial Co are associated (or correlated) with Allied Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Industrial has no effect on the direction of Ji Haw i.e., Ji Haw and Allied Industrial go up and down completely randomly.
Pair Corralation between Ji Haw and Allied Industrial
Assuming the 90 days trading horizon Ji Haw Industrial Co is expected to under-perform the Allied Industrial. In addition to that, Ji Haw is 1.88 times more volatile than Allied Industrial. It trades about -0.18 of its total potential returns per unit of risk. Allied Industrial is currently generating about -0.13 per unit of volatility. If you would invest 1,310 in Allied Industrial on December 29, 2024 and sell it today you would lose (125.00) from holding Allied Industrial or give up 9.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ji Haw Industrial Co vs. Allied Industrial
Performance |
Timeline |
Ji Haw Industrial |
Allied Industrial |
Ji Haw and Allied Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ji Haw and Allied Industrial
The main advantage of trading using opposite Ji Haw and Allied Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ji Haw position performs unexpectedly, Allied Industrial 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 Allied Industrial will offset losses from the drop in Allied Industrial's long position.Ji Haw vs. Chenming Mold Industrial | Ji Haw vs. Tripod Technology Corp | Ji Haw vs. Asia Optical Co | Ji Haw vs. Welltend Technology Corp |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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