Correlation Between Jinhua Capital and Renoworks Software
Can any of the company-specific risk be diversified away by investing in both Jinhua Capital and Renoworks Software 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 Jinhua Capital and Renoworks Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jinhua Capital and Renoworks Software, you can compare the effects of market volatilities on Jinhua Capital and Renoworks Software 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 Jinhua Capital with a short position of Renoworks Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhua Capital and Renoworks Software.
Diversification Opportunities for Jinhua Capital and Renoworks Software
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jinhua and Renoworks is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Jinhua Capital and Renoworks Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renoworks Software and Jinhua Capital 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 Jinhua Capital are associated (or correlated) with Renoworks Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renoworks Software has no effect on the direction of Jinhua Capital i.e., Jinhua Capital and Renoworks Software go up and down completely randomly.
Pair Corralation between Jinhua Capital and Renoworks Software
Assuming the 90 days horizon Jinhua Capital is expected to generate 4.97 times more return on investment than Renoworks Software. However, Jinhua Capital is 4.97 times more volatile than Renoworks Software. It trades about 0.05 of its potential returns per unit of risk. Renoworks Software is currently generating about 0.07 per unit of risk. If you would invest 6.00 in Jinhua Capital on September 12, 2024 and sell it today you would lose (5.50) from holding Jinhua Capital or give up 91.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinhua Capital vs. Renoworks Software
Performance |
| Timeline |
| Jinhua Capital |
| Renoworks Software |
Jinhua Capital and Renoworks Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinhua Capital and Renoworks Software
The main advantage of trading using opposite Jinhua Capital and Renoworks Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhua Capital position performs unexpectedly, Renoworks Software 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 Renoworks Software will offset losses from the drop in Renoworks Software's long position.| Jinhua Capital vs. Renoworks Software | Jinhua Capital vs. Constellation Software | Jinhua Capital vs. Partners Value Investments | Jinhua Capital vs. Wilmington Capital Management |
| Renoworks Software vs. AirIQ Inc | Renoworks Software vs. NamSys Inc | Renoworks Software vs. Bewhere Holdings | Renoworks Software vs. Ackroo 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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