Correlation Between Jia Jie and Chinese Maritime
Can any of the company-specific risk be diversified away by investing in both Jia Jie and Chinese Maritime 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 Chinese Maritime 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 Chinese Maritime Transport, you can compare the effects of market volatilities on Jia Jie and Chinese Maritime 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 Chinese Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jia Jie and Chinese Maritime.
Diversification Opportunities for Jia Jie and Chinese Maritime
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jia and Chinese is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Jia Jie Biomedical and Chinese Maritime Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Maritime Tra 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 Chinese Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Maritime Tra has no effect on the direction of Jia Jie i.e., Jia Jie and Chinese Maritime go up and down completely randomly.
Pair Corralation between Jia Jie and Chinese Maritime
Assuming the 90 days trading horizon Jia Jie Biomedical is expected to generate 1.3 times more return on investment than Chinese Maritime. However, Jia Jie is 1.3 times more volatile than Chinese Maritime Transport. It trades about 0.05 of its potential returns per unit of risk. Chinese Maritime Transport is currently generating about 0.01 per unit of risk. If you would invest 1,408 in Jia Jie Biomedical on October 25, 2024 and sell it today you would earn a total of 712.00 from holding Jia Jie Biomedical or generate 50.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jia Jie Biomedical vs. Chinese Maritime Transport
Performance |
| Timeline |
| Jia Jie Biomedical |
| Chinese Maritime Tra |
Jia Jie and Chinese Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jia Jie and Chinese Maritime
The main advantage of trading using opposite Jia Jie and Chinese Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jia Jie position performs unexpectedly, Chinese Maritime 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 Chinese Maritime will offset losses from the drop in Chinese Maritime's 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 |
| Chinese Maritime vs. U Ming Marine Transport | Chinese Maritime vs. Sincere Navigation Corp | Chinese Maritime vs. Taiwan Navigation Co | Chinese Maritime vs. Huaku Development Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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