Correlation Between Jonjee Hi and Wuliangye Yibin

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

Diversification Opportunities for Jonjee Hi and Wuliangye Yibin

0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Jonjee and Wuliangye is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Jonjee Hi tech Industrial and Wuliangye Yibin Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuliangye Yibin and Jonjee Hi 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 Jonjee Hi tech Industrial are associated (or correlated) with Wuliangye Yibin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuliangye Yibin has no effect on the direction of Jonjee Hi i.e., Jonjee Hi and Wuliangye Yibin go up and down completely randomly.

Pair Corralation between Jonjee Hi and Wuliangye Yibin

Assuming the 90 days trading horizon Jonjee Hi tech Industrial is expected to under-perform the Wuliangye Yibin. In addition to that, Jonjee Hi is 1.13 times more volatile than Wuliangye Yibin Co. It trades about -0.05 of its total potential returns per unit of risk. Wuliangye Yibin Co is currently generating about 0.0 per unit of volatility. If you would invest  16,152  in Wuliangye Yibin Co on August 30, 2024 and sell it today you would lose (1,447) from holding Wuliangye Yibin Co or give up 8.96% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Jonjee Hi tech Industrial  vs.  Wuliangye Yibin Co

 Performance 
       Timeline  
Jonjee Hi tech 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Jonjee Hi tech Industrial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jonjee Hi sustained solid returns over the last few months and may actually be approaching a breakup point.
Wuliangye Yibin 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Wuliangye Yibin Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wuliangye Yibin sustained solid returns over the last few months and may actually be approaching a breakup point.

Jonjee Hi and Wuliangye Yibin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jonjee Hi and Wuliangye Yibin

The main advantage of trading using opposite Jonjee Hi and Wuliangye Yibin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jonjee Hi position performs unexpectedly, Wuliangye Yibin 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 Wuliangye Yibin will offset losses from the drop in Wuliangye Yibin's long position.
The idea behind Jonjee Hi tech Industrial and Wuliangye Yibin 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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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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