Correlation Between Dynamic Medical and Jia Jie
Can any of the company-specific risk be diversified away by investing in both Dynamic Medical and Jia Jie 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 Dynamic Medical and Jia Jie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynamic Medical Technologies and Jia Jie Biomedical, you can compare the effects of market volatilities on Dynamic Medical and Jia Jie 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 Dynamic Medical with a short position of Jia Jie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Medical and Jia Jie.
Diversification Opportunities for Dynamic Medical and Jia Jie
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dynamic and Jia is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Medical Technologies and Jia Jie Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jia Jie Biomedical and Dynamic Medical 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 Dynamic Medical Technologies are associated (or correlated) with Jia Jie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jia Jie Biomedical has no effect on the direction of Dynamic Medical i.e., Dynamic Medical and Jia Jie go up and down completely randomly.
Pair Corralation between Dynamic Medical and Jia Jie
Assuming the 90 days trading horizon Dynamic Medical is expected to generate 1.19 times less return on investment than Jia Jie. But when comparing it to its historical volatility, Dynamic Medical Technologies is 1.05 times less risky than Jia Jie. It trades about 0.04 of its potential returns per unit of risk. Jia Jie Biomedical is currently generating about 0.05 of returns per unit of risk over similar time horizon. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynamic Medical Technologies vs. Jia Jie Biomedical
Performance |
| Timeline |
| Dynamic Medical Tech |
| Jia Jie Biomedical |
Dynamic Medical and Jia Jie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynamic Medical and Jia Jie
The main advantage of trading using opposite Dynamic Medical and Jia Jie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynamic Medical position performs unexpectedly, Jia Jie 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 Jia Jie will offset losses from the drop in Jia Jie's long position.| Dynamic Medical vs. Elan Microelectronics Corp | Dynamic Medical vs. Elite Material Co | Dynamic Medical vs. Goldsun Building Materials | Dynamic Medical vs. Insyde Software |
| Jia Jie vs. Microelectronics Technology | Jia Jie vs. Everlight Electronics Co | Jia Jie vs. Bright Led Electronics | Jia Jie vs. Li Kang 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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