Correlation Between Jiaozuo Wanfang and Markor International

Can any of the company-specific risk be diversified away by investing in both Jiaozuo Wanfang and Markor 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 Jiaozuo Wanfang and Markor International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jiaozuo Wanfang Aluminum and Markor International Home, you can compare the effects of market volatilities on Jiaozuo Wanfang and Markor 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 Jiaozuo Wanfang with a short position of Markor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiaozuo Wanfang and Markor International.

Diversification Opportunities for Jiaozuo Wanfang and Markor International

0.6

Correlation Coefficient

Jiaozuo Wanfang  Markor International

Poor diversification

The 3 months correlation between Jiaozuo and Markor is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jiaozuo Wanfang Aluminum and Markor International Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markor International Home and Jiaozuo Wanfang 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 Jiaozuo Wanfang Aluminum are associated (or correlated) with Markor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markor International Home has no effect on the direction of Jiaozuo Wanfang i.e., Jiaozuo Wanfang and Markor International go up and down completely randomly.

Pair Corralation between Jiaozuo Wanfang and Markor International

Assuming the 90 days trading horizon Jiaozuo Wanfang Aluminum is expected to under-perform the Markor International. But the stock apears to be less risky and, when comparing its historical volatility, Jiaozuo Wanfang Aluminum is 2.66 times less risky than Markor International. The stock trades about -0.06 of its potential returns per unit of risk. The Markor International Home is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  196.00  in Markor International Home on September 20, 2024 and sell it today you would earn a total of  26.00  from holding Markor International Home or generate 13.27% return on investment over 90 days.

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

Jiaozuo Wanfang Aluminum  vs.  Markor International Home

Jiaozuo Wanfang Aluminum

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jiaozuo Wanfang Aluminum are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiaozuo Wanfang sustained solid returns over the last few months and may actually be approaching a breakup point.

Markor International Home

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Markor International Home are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Markor International sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiaozuo Wanfang and Markor International

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

The idea behind Jiaozuo Wanfang Aluminum and Markor International Home 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.