Correlation Between Jia Jie and GeneFerm Biotechnology
Can any of the company-specific risk be diversified away by investing in both Jia Jie and GeneFerm Biotechnology 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 GeneFerm Biotechnology 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 GeneFerm Biotechnology Co, you can compare the effects of market volatilities on Jia Jie and GeneFerm Biotechnology 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 GeneFerm Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jia Jie and GeneFerm Biotechnology.
Diversification Opportunities for Jia Jie and GeneFerm Biotechnology
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jia and GeneFerm is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jia Jie Biomedical and GeneFerm Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneFerm Biotechnology 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 GeneFerm Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneFerm Biotechnology has no effect on the direction of Jia Jie i.e., Jia Jie and GeneFerm Biotechnology go up and down completely randomly.
Pair Corralation between Jia Jie and GeneFerm Biotechnology
Assuming the 90 days trading horizon Jia Jie is expected to generate 3.09 times less return on investment than GeneFerm Biotechnology. But when comparing it to its historical volatility, Jia Jie Biomedical is 1.13 times less risky than GeneFerm Biotechnology. It trades about 0.19 of its potential returns per unit of risk. GeneFerm Biotechnology Co is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 4,280 in GeneFerm Biotechnology Co on November 27, 2024 and sell it today you would earn a total of 1,330 from holding GeneFerm Biotechnology Co or generate 31.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jia Jie Biomedical vs. GeneFerm Biotechnology Co
Performance |
| Timeline |
| Jia Jie Biomedical |
| GeneFerm Biotechnology |
Jia Jie and GeneFerm Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jia Jie and GeneFerm Biotechnology
The main advantage of trading using opposite Jia Jie and GeneFerm Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jia Jie position performs unexpectedly, GeneFerm Biotechnology 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 GeneFerm Biotechnology will offset losses from the drop in GeneFerm Biotechnology's long position.| Jia Jie vs. Taiwan Steel Union | Jia Jie vs. DingZing Advanced Materials | Jia Jie vs. CKM Building Material | Jia Jie vs. Yieh United Steel |
| GeneFerm Biotechnology vs. Great China Metal | GeneFerm Biotechnology vs. First Copper Technology | GeneFerm Biotechnology vs. Solar Applied Materials | GeneFerm Biotechnology vs. Asia Metal 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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