Correlation Between Jinli Group and Super Dragon
Can any of the company-specific risk be diversified away by investing in both Jinli Group and Super Dragon 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 Jinli Group and Super Dragon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jinli Group Holdings and Super Dragon Technology, you can compare the effects of market volatilities on Jinli Group and Super Dragon 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 Jinli Group with a short position of Super Dragon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinli Group and Super Dragon.
Diversification Opportunities for Jinli Group and Super Dragon
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jinli and Super is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Jinli Group Holdings and Super Dragon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Dragon Technology and Jinli Group 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 Jinli Group Holdings are associated (or correlated) with Super Dragon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Dragon Technology has no effect on the direction of Jinli Group i.e., Jinli Group and Super Dragon go up and down completely randomly.
Pair Corralation between Jinli Group and Super Dragon
Assuming the 90 days trading horizon Jinli Group is expected to generate 2.04 times less return on investment than Super Dragon. But when comparing it to its historical volatility, Jinli Group Holdings is 1.67 times less risky than Super Dragon. It trades about 0.03 of its potential returns per unit of risk. Super Dragon Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,095 in Super Dragon Technology on September 3, 2024 and sell it today you would earn a total of 840.00 from holding Super Dragon Technology or generate 40.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinli Group Holdings vs. Super Dragon Technology
Performance |
| Timeline |
| Jinli Group Holdings |
| Super Dragon Technology |
Jinli Group and Super Dragon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinli Group and Super Dragon
The main advantage of trading using opposite Jinli Group and Super Dragon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinli Group position performs unexpectedly, Super Dragon 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 Super Dragon will offset losses from the drop in Super Dragon's long position.| Jinli Group vs. Shui Mu International Co | Jinli Group vs. Les Enphants Co | Jinli Group vs. Victory New Materials | Jinli Group vs. Shinih Enterprise Co |
| Super Dragon vs. Ton Yi Industrial | Super Dragon vs. Shinih Enterprise Co | Super Dragon vs. Kingcan Holdings | Super Dragon vs. Zinwell |
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 Stocks Directory module to find actively traded stocks across global markets.
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