Correlation Between Jia Jie and Microelectronics
Can any of the company-specific risk be diversified away by investing in both Jia Jie and Microelectronics 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 Microelectronics 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 Microelectronics Technology, you can compare the effects of market volatilities on Jia Jie and Microelectronics 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 Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jia Jie and Microelectronics.
Diversification Opportunities for Jia Jie and Microelectronics
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jia and Microelectronics is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jia Jie Biomedical and Microelectronics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microelectronics Tec 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 Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microelectronics Tec has no effect on the direction of Jia Jie i.e., Jia Jie and Microelectronics go up and down completely randomly.
Pair Corralation between Jia Jie and Microelectronics
Assuming the 90 days trading horizon Jia Jie Biomedical is expected to generate 1.12 times more return on investment than Microelectronics. However, Jia Jie is 1.12 times more volatile than Microelectronics Technology. It trades about -0.02 of its potential returns per unit of risk. Microelectronics Technology is currently generating about -0.04 per unit of risk. If you would invest 2,185 in Jia Jie Biomedical on October 26, 2024 and sell it today you would lose (65.00) from holding Jia Jie Biomedical or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jia Jie Biomedical vs. Microelectronics Technology
Performance |
| Timeline |
| Jia Jie Biomedical |
| Microelectronics Tec |
Jia Jie and Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jia Jie and Microelectronics
The main advantage of trading using opposite Jia Jie and Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jia Jie position performs unexpectedly, Microelectronics 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 Microelectronics will offset losses from the drop in Microelectronics' long position.| Jia Jie vs. Microelectronics Technology | Jia Jie vs. Everlight Electronics Co | Jia Jie vs. Bright Led Electronics | Jia Jie vs. Li Kang Biomedical |
| Microelectronics vs. Unimicron Technology Corp | Microelectronics vs. Kinsus Interconnect Technology | Microelectronics vs. Novatek Microelectronics Corp | Microelectronics vs. Delta Electronics |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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