Correlation Between Jinhui Mining and Xiangpiaopiao Food

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Can any of the company-specific risk be diversified away by investing in both Jinhui Mining and Xiangpiaopiao Food 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 Jinhui Mining and Xiangpiaopiao Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jinhui Mining Co and Xiangpiaopiao Food Co, you can compare the effects of market volatilities on Jinhui Mining and Xiangpiaopiao Food 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 Jinhui Mining with a short position of Xiangpiaopiao Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhui Mining and Xiangpiaopiao Food.

Diversification Opportunities for Jinhui Mining and Xiangpiaopiao Food

JinhuiXiangpiaopiaoDiversified AwayJinhuiXiangpiaopiaoDiversified Away100%
-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Jinhui and Xiangpiaopiao is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Jinhui Mining Co and Xiangpiaopiao Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangpiaopiao Food and Jinhui Mining 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 Jinhui Mining Co are associated (or correlated) with Xiangpiaopiao Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangpiaopiao Food has no effect on the direction of Jinhui Mining i.e., Jinhui Mining and Xiangpiaopiao Food go up and down completely randomly.

Pair Corralation between Jinhui Mining and Xiangpiaopiao Food

Assuming the 90 days trading horizon Jinhui Mining Co is expected to under-perform the Xiangpiaopiao Food. But the stock apears to be less risky and, when comparing its historical volatility, Jinhui Mining Co is 3.22 times less risky than Xiangpiaopiao Food. The stock trades about -0.03 of its potential returns per unit of risk. The Xiangpiaopiao Food Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,165  in Xiangpiaopiao Food Co on October 16, 2024 and sell it today you would earn a total of  304.00  from holding Xiangpiaopiao Food Co or generate 26.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jinhui Mining Co  vs.  Xiangpiaopiao Food Co

 Performance 
JavaScript chart by amCharts 3.21.15NovDec 010203040506070
JavaScript chart by amCharts 3.21.15603132 603711
       Timeline  
Jinhui Mining 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Jinhui Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jinhui Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1111.51212.513
Xiangpiaopiao Food 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Xiangpiaopiao Food Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xiangpiaopiao Food sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan121314151617181920

Jinhui Mining and Xiangpiaopiao Food Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.69-2.01-1.34-0.660.00.661.311.972.62 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15603132 603711
       Returns  

Pair Trading with Jinhui Mining and Xiangpiaopiao Food

The main advantage of trading using opposite Jinhui Mining and Xiangpiaopiao Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhui Mining position performs unexpectedly, Xiangpiaopiao Food 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 Xiangpiaopiao Food will offset losses from the drop in Xiangpiaopiao Food's long position.
The idea behind Jinhui Mining Co and Xiangpiaopiao Food 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.
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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