Correlation Between Ju Teng and Digital China
Can any of the company-specific risk be diversified away by investing in both Ju Teng and Digital China 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 Ju Teng and Digital China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ju Teng International and Digital China Holdings, you can compare the effects of market volatilities on Ju Teng and Digital China 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 Ju Teng with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ju Teng and Digital China.
Diversification Opportunities for Ju Teng and Digital China
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 9136 and Digital is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ju Teng International and Digital China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Holdings and Ju Teng 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 Ju Teng International are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Holdings has no effect on the direction of Ju Teng i.e., Ju Teng and Digital China go up and down completely randomly.
Pair Corralation between Ju Teng and Digital China
Assuming the 90 days trading horizon Ju Teng International is expected to under-perform the Digital China. But the stock apears to be less risky and, when comparing its historical volatility, Ju Teng International is 4.62 times less risky than Digital China. The stock trades about -0.15 of its potential returns per unit of risk. The Digital China Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 658.00 in Digital China Holdings on September 12, 2024 and sell it today you would earn a total of 92.00 from holding Digital China Holdings or generate 13.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ju Teng International vs. Digital China Holdings
Performance |
| Timeline |
| Ju Teng International |
| Digital China Holdings |
Ju Teng and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ju Teng and Digital China
The main advantage of trading using opposite Ju Teng and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ju Teng position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| Ju Teng vs. Cal Comp Electronics Public | Ju Teng vs. Catcher Technology Co | Ju Teng vs. Darfon Electronics Corp | Ju Teng vs. Digital China Holdings |
| Digital China vs. Ju Teng International | Digital China vs. Neo Neon Holdings Limited | Digital China vs. Medtecs International | Digital China vs. Vietnam Manufacturing and |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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