Correlation Between Guangdong Liantai and Jiahe Foods
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By analyzing existing cross correlation between Guangdong Liantai Environmental and Jiahe Foods Industry, you can compare the effects of market volatilities on Guangdong Liantai and Jiahe Foods 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 Guangdong Liantai with a short position of Jiahe Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Liantai and Jiahe Foods.
Diversification Opportunities for Guangdong Liantai and Jiahe Foods
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Jiahe is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Liantai Environmenta and Jiahe Foods Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiahe Foods Industry and Guangdong Liantai 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 Guangdong Liantai Environmental are associated (or correlated) with Jiahe Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiahe Foods Industry has no effect on the direction of Guangdong Liantai i.e., Guangdong Liantai and Jiahe Foods go up and down completely randomly.
Pair Corralation between Guangdong Liantai and Jiahe Foods
Assuming the 90 days trading horizon Guangdong Liantai Environmental is expected to under-perform the Jiahe Foods. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Liantai Environmental is 1.37 times less risky than Jiahe Foods. The stock trades about -0.01 of its potential returns per unit of risk. The Jiahe Foods Industry is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,574 in Jiahe Foods Industry on September 9, 2024 and sell it today you would lose (116.00) from holding Jiahe Foods Industry or give up 7.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Liantai Environmenta vs. Jiahe Foods Industry
Performance |
Timeline |
Guangdong Liantai |
Jiahe Foods Industry |
Guangdong Liantai and Jiahe Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Liantai and Jiahe Foods
The main advantage of trading using opposite Guangdong Liantai and Jiahe Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Liantai position performs unexpectedly, Jiahe Foods 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 Jiahe Foods will offset losses from the drop in Jiahe Foods' long position.Guangdong Liantai vs. Shanghai Rongtai Health | Guangdong Liantai vs. Hangzhou Coco Healthcare | Guangdong Liantai vs. Dezhan HealthCare Co | Guangdong Liantai vs. Youngy Health Co |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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