Correlation Between Jia Jie and RDC Semiconductor
Can any of the company-specific risk be diversified away by investing in both Jia Jie and RDC Semiconductor 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 RDC Semiconductor 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 RDC Semiconductor Co, you can compare the effects of market volatilities on Jia Jie and RDC Semiconductor 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 RDC Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jia Jie and RDC Semiconductor.
Diversification Opportunities for Jia Jie and RDC Semiconductor
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jia and RDC is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Jia Jie Biomedical and RDC Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RDC Semiconductor 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 RDC Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RDC Semiconductor has no effect on the direction of Jia Jie i.e., Jia Jie and RDC Semiconductor go up and down completely randomly.
Pair Corralation between Jia Jie and RDC Semiconductor
Assuming the 90 days trading horizon Jia Jie Biomedical is expected to under-perform the RDC Semiconductor. In addition to that, Jia Jie is 1.33 times more volatile than RDC Semiconductor Co. It trades about -0.02 of its total potential returns per unit of risk. RDC Semiconductor Co is currently generating about -0.01 per unit of volatility. If you would invest 20,050 in RDC Semiconductor Co on October 25, 2024 and sell it today you would lose (300.00) from holding RDC Semiconductor Co or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jia Jie Biomedical vs. RDC Semiconductor Co
Performance |
| Timeline |
| Jia Jie Biomedical |
| RDC Semiconductor |
Jia Jie and RDC Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jia Jie and RDC Semiconductor
The main advantage of trading using opposite Jia Jie and RDC Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jia Jie position performs unexpectedly, RDC Semiconductor 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 RDC Semiconductor will offset losses from the drop in RDC Semiconductor's long position.| Jia Jie vs. Uni President Enterprises Corp | Jia Jie vs. Tingyi Holding Corp | Jia Jie vs. Lien Hwa Industrial | Jia Jie vs. Great Wall Enterprise |
| RDC Semiconductor vs. International Games System | RDC Semiconductor vs. Cowealth Medical Holding | RDC Semiconductor vs. Li Kang Biomedical | RDC Semiconductor vs. Jia Jie Biomedical |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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