Correlation Between Jia Jie and DingZing Advanced
Can any of the company-specific risk be diversified away by investing in both Jia Jie and DingZing Advanced 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 DingZing Advanced 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 DingZing Advanced Materials, you can compare the effects of market volatilities on Jia Jie and DingZing Advanced 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 DingZing Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jia Jie and DingZing Advanced.
Diversification Opportunities for Jia Jie and DingZing Advanced
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jia and DingZing is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Jia Jie Biomedical and DingZing Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DingZing Advanced 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 DingZing Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DingZing Advanced has no effect on the direction of Jia Jie i.e., Jia Jie and DingZing Advanced go up and down completely randomly.
Pair Corralation between Jia Jie and DingZing Advanced
Assuming the 90 days trading horizon Jia Jie Biomedical is expected to under-perform the DingZing Advanced. In addition to that, Jia Jie is 1.26 times more volatile than DingZing Advanced Materials. It trades about -0.13 of its total potential returns per unit of risk. DingZing Advanced Materials is currently generating about 0.29 per unit of volatility. If you would invest 13,550 in DingZing Advanced Materials on October 11, 2024 and sell it today you would earn a total of 2,000 from holding DingZing Advanced Materials or generate 14.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jia Jie Biomedical vs. DingZing Advanced Materials
Performance |
| Timeline |
| Jia Jie Biomedical |
| DingZing Advanced |
Jia Jie and DingZing Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jia Jie and DingZing Advanced
The main advantage of trading using opposite Jia Jie and DingZing Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jia Jie position performs unexpectedly, DingZing Advanced 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 DingZing Advanced will offset losses from the drop in DingZing Advanced's long position.| Jia Jie vs. Iron Force Industrial | Jia Jie vs. Mobiletron Electronics Co | Jia Jie vs. Taiwan Mobile Co | Jia Jie vs. Ever Clear Environmental Eng |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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