Correlation Between Jia Jie and Gordon Auto
Can any of the company-specific risk be diversified away by investing in both Jia Jie and Gordon Auto 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 Jia Jie and Gordon Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jia Jie Biomedical and Gordon Auto Body, you can compare the effects of market volatilities on Jia Jie and Gordon Auto 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 Jia Jie with a short position of Gordon Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jia Jie and Gordon Auto.
Diversification Opportunities for Jia Jie and Gordon Auto
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jia and Gordon is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Jia Jie Biomedical and Gordon Auto Body in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gordon Auto Body and Jia Jie 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 Jia Jie Biomedical are associated (or correlated) with Gordon Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gordon Auto Body has no effect on the direction of Jia Jie i.e., Jia Jie and Gordon Auto go up and down completely randomly.
Pair Corralation between Jia Jie and Gordon Auto
Assuming the 90 days trading horizon Jia Jie Biomedical is expected to under-perform the Gordon Auto. But the stock apears to be less risky and, when comparing its historical volatility, Jia Jie Biomedical is 1.42 times less risky than Gordon Auto. The stock trades about -0.13 of its potential returns per unit of risk. The Gordon Auto Body is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,505 in Gordon Auto Body on September 4, 2024 and sell it today you would earn a total of 330.00 from holding Gordon Auto Body or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jia Jie Biomedical vs. Gordon Auto Body
Performance |
| Timeline |
| Jia Jie Biomedical |
| Gordon Auto Body |
Jia Jie and Gordon Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jia Jie and Gordon Auto
The main advantage of trading using opposite Jia Jie and Gordon Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jia Jie position performs unexpectedly, Gordon Auto 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 Gordon Auto will offset losses from the drop in Gordon Auto's long position.| Jia Jie vs. Uni President Enterprises Corp | Jia Jie vs. Lien Hwa Industrial | Jia Jie vs. Great Wall Enterprise | Jia Jie vs. Standard Foods Corp |
| Gordon Auto vs. Kaulin Mfg | Gordon Auto vs. Tex Ray Industrial Co | Gordon Auto vs. De Licacy Industrial | Gordon Auto vs. Kwong Fong Industries |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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