Correlation Between Jia Jie and Sunmax Biotechnology
Can any of the company-specific risk be diversified away by investing in both Jia Jie and Sunmax 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 Sunmax 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 Sunmax Biotechnology Co, you can compare the effects of market volatilities on Jia Jie and Sunmax 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 Sunmax Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jia Jie and Sunmax Biotechnology.
Diversification Opportunities for Jia Jie and Sunmax Biotechnology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jia and Sunmax is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Jia Jie Biomedical and Sunmax Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunmax 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 Sunmax Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunmax Biotechnology has no effect on the direction of Jia Jie i.e., Jia Jie and Sunmax Biotechnology go up and down completely randomly.
Pair Corralation between Jia Jie and Sunmax Biotechnology
Assuming the 90 days trading horizon Jia Jie Biomedical is expected to under-perform the Sunmax Biotechnology. In addition to that, Jia Jie is 1.54 times more volatile than Sunmax Biotechnology Co. It trades about -0.15 of its total potential returns per unit of risk. Sunmax Biotechnology Co is currently generating about 0.11 per unit of volatility. If you would invest 26,350 in Sunmax Biotechnology Co on August 29, 2024 and sell it today you would earn a total of 1,550 from holding Sunmax Biotechnology Co or generate 5.88% 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. Sunmax Biotechnology Co
Performance |
| Timeline |
| Jia Jie Biomedical |
| Sunmax Biotechnology |
Jia Jie and Sunmax Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jia Jie and Sunmax Biotechnology
The main advantage of trading using opposite Jia Jie and Sunmax Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jia Jie position performs unexpectedly, Sunmax 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 Sunmax Biotechnology will offset losses from the drop in Sunmax Biotechnology'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 |
| Sunmax Biotechnology vs. Oneness Biotech Co | Sunmax Biotechnology vs. EirGenix | Sunmax Biotechnology vs. Medigen Vaccine Biologics | Sunmax Biotechnology vs. OBI Pharma |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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