Correlation Between Jiaozuo Wanfang and Orient Sec

Can any of the company-specific risk be diversified away by investing in both Jiaozuo Wanfang and Orient Sec 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 Orient Sec 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 Orient Sec Co, you can compare the effects of market volatilities on Jiaozuo Wanfang and Orient Sec 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 Orient Sec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiaozuo Wanfang and Orient Sec.

Diversification Opportunities for Jiaozuo Wanfang and Orient Sec

-0.19

Correlation Coefficient

Jiaozuo Wanfang  Orient Sec

Good diversification

The 3 months correlation between Jiaozuo and Orient is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jiaozuo Wanfang Aluminum and Orient Sec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Sec 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 Orient Sec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Sec has no effect on the direction of Jiaozuo Wanfang i.e., Jiaozuo Wanfang and Orient Sec go up and down completely randomly.

Pair Corralation between Jiaozuo Wanfang and Orient Sec

Assuming the 90 days trading horizon Jiaozuo Wanfang Aluminum is expected to generate 1.71 times more return on investment than Orient Sec. However, Jiaozuo Wanfang is 1.71 times more volatile than Orient Sec Co. It trades about 0.2 of its potential returns per unit of risk. Orient Sec Co is currently generating about -0.13 per unit of risk. If you would invest  652.00  in Jiaozuo Wanfang Aluminum on December 27, 2024 and sell it today you would earn a total of  210.00  from holding Jiaozuo Wanfang Aluminum or generate 32.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.55%
Values	Daily Returns

Jiaozuo Wanfang Aluminum  vs.  Orient Sec Co

Jiaozuo Wanfang Aluminum

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jiaozuo Wanfang Aluminum are ranked lower than 15 (%) 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.

Orient Sec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orient Sec Co 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 Jiaozuo Wanfang and Orient Sec

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

The idea behind Jiaozuo Wanfang Aluminum and Orient Sec 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.