Correlation Between Hygon Information and Jinxiandai Information

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

By analyzing existing cross correlation between Hygon Information Technology and Jinxiandai Information Industry, you can compare the effects of market volatilities on Hygon Information and Jinxiandai Information 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 Hygon Information with a short position of Jinxiandai Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hygon Information and Jinxiandai Information.

Diversification Opportunities for Hygon Information and Jinxiandai Information

-0.25

Correlation Coefficient

Hygon Information  Jinxiandai Information

Very good diversification

The 3 months correlation between Hygon and Jinxiandai is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hygon Information Technology and Jinxiandai Information Industr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinxiandai Information and Hygon Information 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 Hygon Information Technology are associated (or correlated) with Jinxiandai Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinxiandai Information has no effect on the direction of Hygon Information i.e., Hygon Information and Jinxiandai Information go up and down completely randomly.

Pair Corralation between Hygon Information and Jinxiandai Information

Assuming the 90 days trading horizon Hygon Information Technology is expected to generate 1.17 times more return on investment than Jinxiandai Information. However, Hygon Information is 1.17 times more volatile than Jinxiandai Information Industry. It trades about -0.04 of its potential returns per unit of risk. Jinxiandai Information Industry is currently generating about -0.14 per unit of risk. If you would invest  14,075  in Hygon Information Technology on October 25, 2024 and sell it today you would lose (828.00) from holding Hygon Information Technology or give up 5.88% of portfolio value over 90 days.

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

Hygon Information Technology  vs.  Jinxiandai Information Industr

Hygon Information

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hygon Information Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hygon Information may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Jinxiandai Information

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jinxiandai Information Industry are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jinxiandai Information may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hygon Information and Jinxiandai Information

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

The idea behind Hygon Information Technology and Jinxiandai Information 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 Transaction History module to view history of all your transactions and understand their impact on performance.