Correlation Between Jiangnan Mould and Yuanjie Semiconductor

Can any of the company-specific risk be diversified away by investing in both Jiangnan Mould and Yuanjie Semiconductor 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 Jiangnan Mould and Yuanjie Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jiangnan Mould Plastic and Yuanjie Semiconductor Technology, you can compare the effects of market volatilities on Jiangnan Mould and Yuanjie Semiconductor 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 Jiangnan Mould with a short position of Yuanjie Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangnan Mould and Yuanjie Semiconductor.

Diversification Opportunities for Jiangnan Mould and Yuanjie Semiconductor

-0.05

Correlation Coefficient

Jiangnan Mould  Yuanjie Semiconductor

Good diversification

The 3 months correlation between Jiangnan and Yuanjie is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jiangnan Mould Plastic and Yuanjie Semiconductor Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanjie Semiconductor and Jiangnan Mould 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 Jiangnan Mould Plastic are associated (or correlated) with Yuanjie Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanjie Semiconductor has no effect on the direction of Jiangnan Mould i.e., Jiangnan Mould and Yuanjie Semiconductor go up and down completely randomly.

Pair Corralation between Jiangnan Mould and Yuanjie Semiconductor

Assuming the 90 days trading horizon Jiangnan Mould Plastic is expected to generate 0.62 times more return on investment than Yuanjie Semiconductor. However, Jiangnan Mould Plastic is 1.61 times less risky than Yuanjie Semiconductor. It trades about 0.05 of its potential returns per unit of risk. Yuanjie Semiconductor Technology is currently generating about -0.03 per unit of risk. If you would invest  653.00  in Jiangnan Mould Plastic on October 26, 2024 and sell it today you would earn a total of  39.00  from holding Jiangnan Mould Plastic or generate 5.97% return on investment over 90 days.

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

Jiangnan Mould Plastic  vs.  Yuanjie Semiconductor Technolo

Jiangnan Mould Plastic

Risk-Adjusted Performance

3 of 100

Insignificant

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

Yuanjie Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yuanjie Semiconductor Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Jiangnan Mould and Yuanjie Semiconductor

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

The idea behind Jiangnan Mould Plastic and Yuanjie Semiconductor Technology 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.