Correlation Between Jiahe Foods and G Bits

Can any of the company-specific risk be diversified away by investing in both Jiahe Foods and G Bits 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 G Bits 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 G bits Network Technology, you can compare the effects of market volatilities on Jiahe Foods and G Bits 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 G Bits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiahe Foods and G Bits.

Diversification Opportunities for Jiahe Foods and G Bits

0.1

Correlation Coefficient

Jiahe Foods  G Bits

Average diversification

The 3 months correlation between Jiahe and 603444 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jiahe Foods Industry and G bits Network Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G bits Network 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 G Bits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G bits Network has no effect on the direction of Jiahe Foods i.e., Jiahe Foods and G Bits go up and down completely randomly.

Pair Corralation between Jiahe Foods and G Bits

Assuming the 90 days trading horizon Jiahe Foods is expected to generate 2.72 times less return on investment than G Bits. In addition to that, Jiahe Foods is 1.01 times more volatile than G bits Network Technology. It trades about 0.02 of its total potential returns per unit of risk. G bits Network Technology is currently generating about 0.06 per unit of volatility. If you would invest  18,500  in G bits Network Technology on September 28, 2024 and sell it today you would earn a total of  3,960  from holding G bits Network Technology or generate 21.41% return on investment over 90 days.

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

Jiahe Foods Industry  vs.  G bits Network Technology

Jiahe Foods Industry

Risk-Adjusted Performance

2 of 100

Insignificant

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 January 2025.

G bits Network

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jiahe Foods and G Bits

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

The idea behind Jiahe Foods Industry and G bits Network Technology 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.