Correlation Between Jiahe Foods and Impulse Qingdao

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

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

Diversification Opportunities for Jiahe Foods and Impulse Qingdao

0.78

Correlation Coefficient

Jiahe Foods  Impulse Qingdao

Poor diversification

The 3 months correlation between Jiahe and Impulse is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jiahe Foods Industry and Impulse Qingdao Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impulse Qingdao Health and Jiahe Foods 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 Jiahe Foods Industry are associated (or correlated) with Impulse Qingdao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impulse Qingdao Health has no effect on the direction of Jiahe Foods i.e., Jiahe Foods and Impulse Qingdao go up and down completely randomly.

Pair Corralation between Jiahe Foods and Impulse Qingdao

Assuming the 90 days trading horizon Jiahe Foods is expected to generate 1.42 times less return on investment than Impulse Qingdao. But when comparing it to its historical volatility, Jiahe Foods Industry is 1.2 times less risky than Impulse Qingdao. It trades about 0.2 of its potential returns per unit of risk. Impulse Qingdao Health is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,258  in Impulse Qingdao Health on September 13, 2024 and sell it today you would earn a total of  934.00  from holding Impulse Qingdao Health or generate 74.24% return on investment over 90 days.

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

Jiahe Foods Industry  vs.  Impulse Qingdao Health

Jiahe Foods Industry

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jiahe Foods Industry are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiahe Foods sustained solid returns over the last few months and may actually be approaching a breakup point.

Impulse Qingdao Health

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Impulse Qingdao Health are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Impulse Qingdao sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiahe Foods and Impulse Qingdao

The main advantage of trading using opposite Jiahe Foods and Impulse Qingdao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiahe Foods position performs unexpectedly, Impulse Qingdao 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 Impulse Qingdao will offset losses from the drop in Impulse Qingdao's long position.

The idea behind Jiahe Foods Industry and Impulse Qingdao Health 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.