Correlation Between Cowealth Medical and Jia Jie
Can any of the company-specific risk be diversified away by investing in both Cowealth 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 Cowealth 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 Cowealth Medical Holding and Jia Jie Biomedical, you can compare the effects of market volatilities on Cowealth 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 Cowealth Medical with a short position of Jia Jie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cowealth Medical and Jia Jie.
Diversification Opportunities for Cowealth Medical and Jia Jie
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cowealth and Jia is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cowealth Medical Holding 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 Cowealth 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 Cowealth Medical Holding 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 Cowealth Medical i.e., Cowealth Medical and Jia Jie go up and down completely randomly.
Pair Corralation between Cowealth Medical and Jia Jie
Assuming the 90 days trading horizon Cowealth Medical Holding is expected to under-perform the Jia Jie. But the stock apears to be less risky and, when comparing its historical volatility, Cowealth Medical Holding is 2.48 times less risky than Jia Jie. The stock trades about -0.03 of its potential returns per unit of risk. The 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cowealth Medical Holding vs. Jia Jie Biomedical
Performance |
| Timeline |
| Cowealth Medical Holding |
| Jia Jie Biomedical |
Cowealth Medical and Jia Jie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cowealth Medical and Jia Jie
The main advantage of trading using opposite Cowealth Medical and Jia Jie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cowealth 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.| Cowealth Medical vs. Prime Oil Chemical | Cowealth Medical vs. Shiny Chemical Industrial | Cowealth Medical vs. AVer Information | Cowealth Medical vs. Eagle Cold Storage |
| 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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