Correlation Between Jia Jie and GrandTech
Can any of the company-specific risk be diversified away by investing in both Jia Jie and GrandTech 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 GrandTech 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 GrandTech CG Systems, you can compare the effects of market volatilities on Jia Jie and GrandTech 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 GrandTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jia Jie and GrandTech.
Diversification Opportunities for Jia Jie and GrandTech
Modest diversification
The 3 months correlation between Jia and GrandTech is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jia Jie Biomedical and GrandTech CG Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrandTech CG Systems 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 GrandTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrandTech CG Systems has no effect on the direction of Jia Jie i.e., Jia Jie and GrandTech go up and down completely randomly.
Pair Corralation between Jia Jie and GrandTech
Assuming the 90 days trading horizon Jia Jie Biomedical is expected to generate 3.35 times more return on investment than GrandTech. However, Jia Jie is 3.35 times more volatile than GrandTech CG Systems. It trades about 0.13 of its potential returns per unit of risk. GrandTech CG Systems is currently generating about 0.3 per unit of risk. If you would invest 2,045 in Jia Jie Biomedical on November 28, 2024 and sell it today you would earn a total of 135.00 from holding Jia Jie Biomedical or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Jia Jie Biomedical vs. GrandTech CG Systems
Performance |
| Timeline |
| Jia Jie Biomedical |
| GrandTech CG Systems |
Jia Jie and GrandTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jia Jie and GrandTech
The main advantage of trading using opposite Jia Jie and GrandTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jia Jie position performs unexpectedly, GrandTech 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 GrandTech will offset losses from the drop in GrandTech's long position.| Jia Jie vs. Healthconn Corp | Jia Jie vs. C Media Electronics | Jia Jie vs. WinMate Communication INC | Jia Jie vs. SS Healthcare Holding |
| GrandTech vs. Elan Microelectronics Corp | GrandTech vs. Cameo Communications | GrandTech vs. Far EasTone Telecommunications | GrandTech vs. Tai Tung Communication |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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