Correlation Between Lander Sports and Jiangsu Jinling

Can any of the company-specific risk be diversified away by investing in both Lander Sports and Jiangsu Jinling 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 Lander Sports and Jiangsu Jinling into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lander Sports Development and Jiangsu Jinling Sports, you can compare the effects of market volatilities on Lander Sports and Jiangsu Jinling 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 Lander Sports with a short position of Jiangsu Jinling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lander Sports and Jiangsu Jinling.

Diversification Opportunities for Lander Sports and Jiangsu Jinling

0.57

Correlation Coefficient

Lander Sports  Jiangsu Jinling

Very weak diversification

The 3 months correlation between Lander and Jiangsu is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lander Sports Development and Jiangsu Jinling Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Jinling Sports and Lander Sports 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 Lander Sports Development are associated (or correlated) with Jiangsu Jinling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Jinling Sports has no effect on the direction of Lander Sports i.e., Lander Sports and Jiangsu Jinling go up and down completely randomly.

Pair Corralation between Lander Sports and Jiangsu Jinling

Assuming the 90 days trading horizon Lander Sports is expected to generate 2.1 times less return on investment than Jiangsu Jinling. But when comparing it to its historical volatility, Lander Sports Development is 1.28 times less risky than Jiangsu Jinling. It trades about 0.05 of its potential returns per unit of risk. Jiangsu Jinling Sports is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,288  in Jiangsu Jinling Sports on December 2, 2024 and sell it today you would earn a total of  44.00  from holding Jiangsu Jinling Sports or generate 3.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Lander Sports Development  vs.  Jiangsu Jinling Sports

Lander Sports Development

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lander Sports Development are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lander Sports sustained solid returns over the last few months and may actually be approaching a breakup point.

Jiangsu Jinling Sports

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jiangsu Jinling Sports has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Lander Sports and Jiangsu Jinling

The main advantage of trading using opposite Lander Sports and Jiangsu Jinling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lander Sports position performs unexpectedly, Jiangsu Jinling 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 Jiangsu Jinling will offset losses from the drop in Jiangsu Jinling's long position.

The idea behind Lander Sports Development and Jiangsu Jinling Sports 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.