Correlation Between China Times and Jia Jie
Can any of the company-specific risk be diversified away by investing in both China Times 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 China Times and Jia Jie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Times Publishing and Jia Jie Biomedical, you can compare the effects of market volatilities on China Times 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 China Times with a short position of Jia Jie. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Times and Jia Jie.
Diversification Opportunities for China Times and Jia Jie
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Jia is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding China Times Publishing 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 China Times 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 China Times Publishing 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 China Times i.e., China Times and Jia Jie go up and down completely randomly.
Pair Corralation between China Times and Jia Jie
Assuming the 90 days trading horizon China Times is expected to generate 8.91 times less return on investment than Jia Jie. In addition to that, China Times is 1.39 times more volatile than Jia Jie Biomedical. It trades about 0.01 of its total potential returns per unit of risk. Jia Jie Biomedical is currently generating about 0.07 per unit of volatility. 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Times Publishing vs. Jia Jie Biomedical
Performance |
| Timeline |
| China Times Publishing |
| Jia Jie Biomedical |
China Times and Jia Jie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Times and Jia Jie
The main advantage of trading using opposite China Times and Jia Jie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Times 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.| China Times vs. Fubon MSCI Taiwan | China Times vs. YuantaP shares Taiwan Top | China Times vs. YuantaP shares Taiwan Electronics | China Times vs. YuantaP shares Taiwan Mid Cap |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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