Correlation Between Holitech Technology and Jinyu Bio-Technology

Can any of the company-specific risk be diversified away by investing in both Holitech Technology and Jinyu Bio-Technology 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 Holitech Technology and Jinyu Bio-Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Holitech Technology Co and Jinyu Bio Technology Co, you can compare the effects of market volatilities on Holitech Technology and Jinyu Bio-Technology 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 Holitech Technology with a short position of Jinyu Bio-Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holitech Technology and Jinyu Bio-Technology.

Diversification Opportunities for Holitech Technology and Jinyu Bio-Technology

0.72

Correlation Coefficient

Holitech Technology  Jinyu Bio-Technology

Poor diversification

The 3 months correlation between Holitech and Jinyu is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Holitech Technology Co and Jinyu Bio Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinyu Bio Technology and Holitech Technology 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 Holitech Technology Co are associated (or correlated) with Jinyu Bio-Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinyu Bio Technology has no effect on the direction of Holitech Technology i.e., Holitech Technology and Jinyu Bio-Technology go up and down completely randomly.

Pair Corralation between Holitech Technology and Jinyu Bio-Technology

Assuming the 90 days trading horizon Holitech Technology Co is expected to under-perform the Jinyu Bio-Technology. In addition to that, Holitech Technology is 1.44 times more volatile than Jinyu Bio Technology Co. It trades about -0.06 of its total potential returns per unit of risk. Jinyu Bio Technology Co is currently generating about -0.06 per unit of volatility. If you would invest  701.00  in Jinyu Bio Technology Co on December 2, 2024 and sell it today you would lose (54.00) from holding Jinyu Bio Technology Co or give up 7.7% of portfolio value over 90 days.

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

Holitech Technology Co  vs.  Jinyu Bio Technology Co

Holitech Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Holitech Technology Co 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.

Jinyu Bio Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jinyu Bio Technology Co 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 Holitech Technology and Jinyu Bio-Technology

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

The idea behind Holitech Technology Co and Jinyu Bio Technology 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.