Correlation Between Jiangsu Yanghe and Inly Media

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

Diversification Opportunities for Jiangsu Yanghe and Inly Media

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Jiangsu and Inly is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Yanghe Brewery and Inly Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inly Media and Jiangsu Yanghe 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 Jiangsu Yanghe Brewery are associated (or correlated) with Inly Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inly Media has no effect on the direction of Jiangsu Yanghe i.e., Jiangsu Yanghe and Inly Media go up and down completely randomly.

Pair Corralation between Jiangsu Yanghe and Inly Media

Assuming the 90 days trading horizon Jiangsu Yanghe Brewery is expected to under-perform the Inly Media. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Yanghe Brewery is 4.18 times less risky than Inly Media. The stock trades about -0.21 of its potential returns per unit of risk. The Inly Media Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,645  in Inly Media Co on September 12, 2024 and sell it today you would earn a total of  168.00  from holding Inly Media Co or generate 10.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Jiangsu Yanghe Brewery  vs.  Inly Media Co

 Performance 
       Timeline  
Jiangsu Yanghe Brewery 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Jiangsu Yanghe Brewery are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangsu Yanghe sustained solid returns over the last few months and may actually be approaching a breakup point.
Inly Media 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Inly Media Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Inly Media sustained solid returns over the last few months and may actually be approaching a breakup point.

Jiangsu Yanghe and Inly Media Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jiangsu Yanghe and Inly Media

The main advantage of trading using opposite Jiangsu Yanghe and Inly Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Yanghe position performs unexpectedly, Inly Media 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 Inly Media will offset losses from the drop in Inly Media's long position.
The idea behind Jiangsu Yanghe Brewery and Inly Media 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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