Correlation Between Jardine Matheson and Fosun International
Can any of the company-specific risk be diversified away by investing in both Jardine Matheson and Fosun International 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 Jardine Matheson and Fosun International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jardine Matheson Holdings and Fosun International, you can compare the effects of market volatilities on Jardine Matheson and Fosun International 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 Jardine Matheson with a short position of Fosun International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jardine Matheson and Fosun International.
Diversification Opportunities for Jardine Matheson and Fosun International
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jardine and Fosun is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Jardine Matheson Holdings and Fosun International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fosun International and Jardine Matheson 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 Jardine Matheson Holdings are associated (or correlated) with Fosun International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fosun International has no effect on the direction of Jardine Matheson i.e., Jardine Matheson and Fosun International go up and down completely randomly.
Pair Corralation between Jardine Matheson and Fosun International
Assuming the 90 days horizon Jardine Matheson Holdings is expected to generate 0.35 times more return on investment than Fosun International. However, Jardine Matheson Holdings is 2.87 times less risky than Fosun International. It trades about 0.04 of its potential returns per unit of risk. Fosun International is currently generating about 0.01 per unit of risk. If you would invest 3,750 in Jardine Matheson Holdings on September 1, 2024 and sell it today you would earn a total of 364.00 from holding Jardine Matheson Holdings or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.65% |
| Values | Daily Returns |
Jardine Matheson Holdings vs. Fosun International
Performance |
| Timeline |
| Jardine Matheson Holdings |
| Fosun International |
Jardine Matheson and Fosun International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jardine Matheson and Fosun International
The main advantage of trading using opposite Jardine Matheson and Fosun International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jardine Matheson position performs unexpectedly, Fosun International 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 Fosun International will offset losses from the drop in Fosun International's long position.| Jardine Matheson vs. 3M Company | Jardine Matheson vs. CK Hutchison Holdings | Jardine Matheson vs. Swire Pacific Ltd | Jardine Matheson vs. Teijin |
| Fosun International vs. Global Tech Industries | Fosun International vs. NN Inc | Fosun International vs. National Health Scan | Fosun International vs. RCABS Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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