Correlation Between Shenwu Energy and JiShi Media

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

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

Diversification Opportunities for Shenwu Energy and JiShi Media

0.09

Correlation Coefficient

Shenwu Energy  JiShi Media

Significant diversification

The 3 months correlation between Shenwu and JiShi is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Shenwu Energy Saving and JiShi Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JiShi Media and Shenwu 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 Shenwu Energy Saving are associated (or correlated) with JiShi Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JiShi Media has no effect on the direction of Shenwu Energy i.e., Shenwu Energy and JiShi Media go up and down completely randomly.

Pair Corralation between Shenwu Energy and JiShi Media

Assuming the 90 days trading horizon Shenwu Energy Saving is expected to under-perform the JiShi Media. In addition to that, Shenwu Energy is 1.22 times more volatile than JiShi Media Co. It trades about -0.02 of its total potential returns per unit of risk. JiShi Media Co is currently generating about 0.03 per unit of volatility. If you would invest  186.00  in JiShi Media Co on December 25, 2024 and sell it today you would earn a total of  3.00  from holding JiShi Media Co or generate 1.61% return on investment over 90 days.

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

Shenwu Energy Saving  vs.  JiShi Media Co

Shenwu Energy Saving

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shenwu Energy Saving 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.

JiShi Media

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JiShi Media Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, JiShi 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 Shenwu Energy and JiShi Media

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

The idea behind Shenwu Energy Saving and JiShi 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 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.