Correlation Between Qingdao Citymedia and JuneYao Dairy

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Can any of the company-specific risk be diversified away by investing in both Qingdao Citymedia and JuneYao Dairy 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 Qingdao Citymedia and JuneYao Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qingdao Citymedia Co and JuneYao Dairy Co, you can compare the effects of market volatilities on Qingdao Citymedia and JuneYao Dairy 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 Qingdao Citymedia with a short position of JuneYao Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Citymedia and JuneYao Dairy.

Diversification Opportunities for Qingdao Citymedia and JuneYao Dairy

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Qingdao and JuneYao is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Citymedia Co and JuneYao Dairy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JuneYao Dairy and Qingdao Citymedia 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 Qingdao Citymedia Co are associated (or correlated) with JuneYao Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JuneYao Dairy has no effect on the direction of Qingdao Citymedia i.e., Qingdao Citymedia and JuneYao Dairy go up and down completely randomly.

Pair Corralation between Qingdao Citymedia and JuneYao Dairy

Assuming the 90 days trading horizon Qingdao Citymedia is expected to generate 2.22 times less return on investment than JuneYao Dairy. But when comparing it to its historical volatility, Qingdao Citymedia Co is 1.76 times less risky than JuneYao Dairy. It trades about 0.31 of its potential returns per unit of risk. JuneYao Dairy Co is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  569.00  in JuneYao Dairy Co on September 4, 2024 and sell it today you would earn a total of  196.00  from holding JuneYao Dairy Co or generate 34.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Qingdao Citymedia Co  vs.  JuneYao Dairy Co

 Performance 
       Timeline  
Qingdao Citymedia 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Qingdao Citymedia Co are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Qingdao Citymedia sustained solid returns over the last few months and may actually be approaching a breakup point.
JuneYao Dairy 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in JuneYao Dairy Co are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JuneYao Dairy sustained solid returns over the last few months and may actually be approaching a breakup point.

Qingdao Citymedia and JuneYao Dairy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Qingdao Citymedia and JuneYao Dairy

The main advantage of trading using opposite Qingdao Citymedia and JuneYao Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Citymedia position performs unexpectedly, JuneYao Dairy 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 JuneYao Dairy will offset losses from the drop in JuneYao Dairy's long position.
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The idea behind Qingdao Citymedia Co and JuneYao Dairy Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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