Correlation Between Jointo Energy and Ciwen Media

Can any of the company-specific risk be diversified away by investing in both Jointo Energy and Ciwen Media 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 Jointo Energy and Ciwen Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jointo Energy Investment and Ciwen Media Co, you can compare the effects of market volatilities on Jointo Energy and Ciwen Media 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 Jointo Energy with a short position of Ciwen Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jointo Energy and Ciwen Media.

Diversification Opportunities for Jointo Energy and Ciwen Media

0.24

Correlation Coefficient

Jointo Energy  Ciwen Media

Modest diversification

The 3 months correlation between Jointo and Ciwen is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jointo Energy Investment and Ciwen Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciwen Media and Jointo Energy 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 Jointo Energy Investment are associated (or correlated) with Ciwen Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciwen Media has no effect on the direction of Jointo Energy i.e., Jointo Energy and Ciwen Media go up and down completely randomly.

Pair Corralation between Jointo Energy and Ciwen Media

Assuming the 90 days trading horizon Jointo Energy is expected to generate 1.86 times less return on investment than Ciwen Media. But when comparing it to its historical volatility, Jointo Energy Investment is 1.54 times less risky than Ciwen Media. It trades about 0.01 of its potential returns per unit of risk. Ciwen Media Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  682.00  in Ciwen Media Co on October 24, 2024 and sell it today you would lose (78.00) from holding Ciwen Media Co or give up 11.44% of portfolio value over 90 days.

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

Jointo Energy Investment  vs.  Ciwen Media Co

Jointo Energy Investment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jointo Energy Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jointo Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ciwen Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ciwen Media Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ciwen Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jointo Energy and Ciwen Media

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

The idea behind Jointo Energy Investment and Ciwen Media Co 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.