Correlation Between JLF INVESTMENT and CHINA TONTINE
Can any of the company-specific risk be diversified away by investing in both JLF INVESTMENT and CHINA TONTINE 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 JLF INVESTMENT and CHINA TONTINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JLF INVESTMENT and CHINA TONTINE WINES, you can compare the effects of market volatilities on JLF INVESTMENT and CHINA TONTINE 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 JLF INVESTMENT with a short position of CHINA TONTINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of JLF INVESTMENT and CHINA TONTINE.
Diversification Opportunities for JLF INVESTMENT and CHINA TONTINE
-1.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JLF and CHINA is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding JLF INVESTMENT and CHINA TONTINE WINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA TONTINE WINES and JLF INVESTMENT 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 JLF INVESTMENT are associated (or correlated) with CHINA TONTINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA TONTINE WINES has no effect on the direction of JLF INVESTMENT i.e., JLF INVESTMENT and CHINA TONTINE go up and down completely randomly.
Pair Corralation between JLF INVESTMENT and CHINA TONTINE
Assuming the 90 days trading horizon JLF INVESTMENT is expected to under-perform the CHINA TONTINE. But the stock apears to be less risky and, when comparing its historical volatility, JLF INVESTMENT is 18.48 times less risky than CHINA TONTINE. The stock trades about -0.04 of its potential returns per unit of risk. The CHINA TONTINE WINES is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.70 in CHINA TONTINE WINES on September 26, 2024 and sell it today you would earn a total of 6.30 from holding CHINA TONTINE WINES or generate 900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JLF INVESTMENT vs. CHINA TONTINE WINES
Performance |
| Timeline |
| JLF INVESTMENT |
| CHINA TONTINE WINES |
JLF INVESTMENT and CHINA TONTINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JLF INVESTMENT and CHINA TONTINE
The main advantage of trading using opposite JLF INVESTMENT and CHINA TONTINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLF INVESTMENT position performs unexpectedly, CHINA TONTINE 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 CHINA TONTINE will offset losses from the drop in CHINA TONTINE's long position.| JLF INVESTMENT vs. Apple Inc | JLF INVESTMENT vs. Apple Inc | JLF INVESTMENT vs. Microsoft | JLF INVESTMENT vs. Microsoft |
| CHINA TONTINE vs. INSURANCE AUST GRP | CHINA TONTINE vs. Apollo Investment Corp | CHINA TONTINE vs. JLF INVESTMENT | CHINA TONTINE vs. Virtus Investment Partners |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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