Correlation Between Shenzhen MYS and Jiangsu Bioperfectus

Can any of the company-specific risk be diversified away by investing in both Shenzhen MYS and Jiangsu Bioperfectus 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 Shenzhen MYS and Jiangsu Bioperfectus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shenzhen MYS Environmental and Jiangsu Bioperfectus Technologies, you can compare the effects of market volatilities on Shenzhen MYS and Jiangsu Bioperfectus 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 Shenzhen MYS with a short position of Jiangsu Bioperfectus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MYS and Jiangsu Bioperfectus.

Diversification Opportunities for Shenzhen MYS and Jiangsu Bioperfectus

0.32

Correlation Coefficient

Shenzhen MYS  Jiangsu Bioperfectus

Weak diversification

The 3 months correlation between Shenzhen and Jiangsu is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MYS Environmental and Jiangsu Bioperfectus Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Bioperfectus and Shenzhen MYS 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 Shenzhen MYS Environmental are associated (or correlated) with Jiangsu Bioperfectus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Bioperfectus has no effect on the direction of Shenzhen MYS i.e., Shenzhen MYS and Jiangsu Bioperfectus go up and down completely randomly.

Pair Corralation between Shenzhen MYS and Jiangsu Bioperfectus

Assuming the 90 days trading horizon Shenzhen MYS Environmental is expected to under-perform the Jiangsu Bioperfectus. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen MYS Environmental is 1.41 times less risky than Jiangsu Bioperfectus. The stock trades about -0.01 of its potential returns per unit of risk. The Jiangsu Bioperfectus Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6,690  in Jiangsu Bioperfectus Technologies on December 27, 2024 and sell it today you would earn a total of  417.00  from holding Jiangsu Bioperfectus Technologies or generate 6.23% return on investment over 90 days.

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

Shenzhen MYS Environmental  vs.  Jiangsu Bioperfectus Technolog

Shenzhen MYS Environ

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shenzhen MYS Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shenzhen MYS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jiangsu Bioperfectus

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Shenzhen MYS and Jiangsu Bioperfectus

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

The idea behind Shenzhen MYS Environmental and Jiangsu Bioperfectus Technologies 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.