Correlation Between Medigen Biotechnology and Jia Jie
Can any of the company-specific risk be diversified away by investing in both Medigen Biotechnology and Jia Jie 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 Medigen Biotechnology and Jia Jie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medigen Biotechnology and Jia Jie Biomedical, you can compare the effects of market volatilities on Medigen Biotechnology and Jia Jie 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 Medigen Biotechnology with a short position of Jia Jie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medigen Biotechnology and Jia Jie.
Diversification Opportunities for Medigen Biotechnology and Jia Jie
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Medigen and Jia is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Medigen Biotechnology and Jia Jie Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jia Jie Biomedical and Medigen Biotechnology 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 Medigen Biotechnology are associated (or correlated) with Jia Jie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jia Jie Biomedical has no effect on the direction of Medigen Biotechnology i.e., Medigen Biotechnology and Jia Jie go up and down completely randomly.
Pair Corralation between Medigen Biotechnology and Jia Jie
Assuming the 90 days trading horizon Medigen Biotechnology is expected to generate 7.58 times less return on investment than Jia Jie. But when comparing it to its historical volatility, Medigen Biotechnology is 1.21 times less risky than Jia Jie. It trades about 0.02 of its potential returns per unit of risk. Jia Jie Biomedical is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,045 in Jia Jie Biomedical on November 28, 2024 and sell it today you would earn a total of 135.00 from holding Jia Jie Biomedical or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Medigen Biotechnology vs. Jia Jie Biomedical
Performance |
| Timeline |
| Medigen Biotechnology |
| Jia Jie Biomedical |
Medigen Biotechnology and Jia Jie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medigen Biotechnology and Jia Jie
The main advantage of trading using opposite Medigen Biotechnology and Jia Jie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medigen Biotechnology position performs unexpectedly, Jia Jie 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 Jia Jie will offset losses from the drop in Jia Jie's long position.| Medigen Biotechnology vs. Orient Semiconductor Electronics | Medigen Biotechnology vs. Bright Led Electronics | Medigen Biotechnology vs. Taiwan Chinsan Electronic | Medigen Biotechnology vs. First Hotel 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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