Correlation Between Great Computer and Jia Jie
Can any of the company-specific risk be diversified away by investing in both Great 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 Great 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 Great Computer and Jia Jie Biomedical, you can compare the effects of market volatilities on Great 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 Great Computer with a short position of Jia Jie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Computer and Jia Jie.
Diversification Opportunities for Great Computer and Jia Jie
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Great and Jia is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Great Computer 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 Great 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 Great Computer 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 Great Computer i.e., Great Computer and Jia Jie go up and down completely randomly.
Pair Corralation between Great Computer and Jia Jie
Assuming the 90 days trading horizon Great Computer is expected to generate 28.75 times more return on investment than Jia Jie. However, Great Computer is 28.75 times more volatile than Jia Jie Biomedical. It trades about 0.08 of its potential returns per unit of risk. Jia Jie Biomedical is currently generating about 0.07 per unit of risk. If you would invest 1,630 in Great Computer on September 5, 2024 and sell it today you would earn a total of 235.00 from holding Great Computer or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Computer vs. Jia Jie Biomedical
Performance |
| Timeline |
| Great Computer |
| Jia Jie Biomedical |
Great Computer and Jia Jie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Computer and Jia Jie
The main advantage of trading using opposite Great Computer and Jia Jie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great 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.| Great Computer vs. Tex Ray Industrial Co | Great Computer vs. Tsang Yow Industrial | Great Computer vs. Meiloon Industrial Co | Great Computer vs. Level Biotechnology |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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