Correlation Between America Great and Jadeart
Can any of the company-specific risk be diversified away by investing in both America Great and Jadeart 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 America Great and Jadeart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between America Great Health and Jadeart Group, you can compare the effects of market volatilities on America Great and Jadeart 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 America Great with a short position of Jadeart. Check out your portfolio center. Please also check ongoing floating volatility patterns of America Great and Jadeart.
Diversification Opportunities for America Great and Jadeart
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between America and Jadeart is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding America Great Health and Jadeart Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadeart Group and America Great 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 America Great Health are associated (or correlated) with Jadeart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadeart Group has no effect on the direction of America Great i.e., America Great and Jadeart go up and down completely randomly.
Pair Corralation between America Great and Jadeart
If you would invest 0.24 in Jadeart Group on August 30, 2024 and sell it today you would earn a total of 0.16 from holding Jadeart Group or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
America Great Health vs. Jadeart Group
Performance |
| Timeline |
| America Great Health |
| Jadeart Group |
America Great and Jadeart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with America Great and Jadeart
The main advantage of trading using opposite America Great and Jadeart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if America Great position performs unexpectedly, Jadeart 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 Jadeart will offset losses from the drop in Jadeart's long position.The idea behind America Great Health and Jadeart Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jadeart vs. China Sun Grp | Jadeart vs. Lotus Pharmaceuticals | Jadeart vs. China Medicine | Jadeart vs. China Clean Energy |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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