Correlation Between Sunfar Computer and Jia Jie
Can any of the company-specific risk be diversified away by investing in both Sunfar Computer 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 Sunfar Computer and Jia Jie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunfar Computer Co and Jia Jie Biomedical, you can compare the effects of market volatilities on Sunfar Computer 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 Sunfar Computer with a short position of Jia Jie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunfar Computer and Jia Jie.
Diversification Opportunities for Sunfar Computer and Jia Jie
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunfar and Jia is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sunfar Computer Co 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 Sunfar Computer 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 Sunfar Computer Co 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 Sunfar Computer i.e., Sunfar Computer and Jia Jie go up and down completely randomly.
Pair Corralation between Sunfar Computer and Jia Jie
Assuming the 90 days trading horizon Sunfar Computer Co is expected to under-perform the Jia Jie. But the stock apears to be less risky and, when comparing its historical volatility, Sunfar Computer Co is 3.83 times less risky than Jia Jie. The stock trades about -0.08 of its potential returns per unit of risk. The Jia Jie Biomedical is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,979 in Jia Jie Biomedical on September 5, 2024 and sell it today you would earn a total of 466.00 from holding Jia Jie Biomedical or generate 23.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunfar Computer Co vs. Jia Jie Biomedical
Performance |
| Timeline |
| Sunfar Computer |
| Jia Jie Biomedical |
Sunfar Computer and Jia Jie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunfar Computer and Jia Jie
The main advantage of trading using opposite Sunfar Computer and Jia Jie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunfar Computer 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.| Sunfar Computer vs. Space Shuttle Hi Tech | Sunfar Computer vs. Ruentex Development Co | Sunfar Computer vs. Symtek Automation Asia | Sunfar Computer vs. CTCI Corp |
| Jia Jie vs. Professional Computer Technology | Jia Jie vs. China Times Publishing | Jia Jie vs. Great Computer | Jia Jie vs. Sunfar Computer Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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