Correlation Between Zhejiang JIULI and Time Publishing

Can any of the company-specific risk be diversified away by investing in both Zhejiang JIULI and Time Publishing 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 Zhejiang JIULI and Time Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zhejiang JIULI Hi tech and Time Publishing and, you can compare the effects of market volatilities on Zhejiang JIULI and Time Publishing 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 Zhejiang JIULI with a short position of Time Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang JIULI and Time Publishing.

Diversification Opportunities for Zhejiang JIULI and Time Publishing

0.72

Correlation Coefficient

Zhejiang JIULI  Time Publishing

Poor diversification

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

Pair Corralation between Zhejiang JIULI and Time Publishing

Assuming the 90 days trading horizon Zhejiang JIULI is expected to generate 18.85 times less return on investment than Time Publishing. But when comparing it to its historical volatility, Zhejiang JIULI Hi tech is 1.02 times less risky than Time Publishing. It trades about 0.01 of its potential returns per unit of risk. Time Publishing and is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  848.00  in Time Publishing and on September 23, 2024 and sell it today you would earn a total of  76.00  from holding Time Publishing and or generate 8.96% return on investment over 90 days.

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

Zhejiang JIULI Hi tech  vs.  Time Publishing and

Zhejiang JIULI Hi

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zhejiang JIULI Hi tech are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhejiang JIULI sustained solid returns over the last few months and may actually be approaching a breakup point.

Time Publishing

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Time Publishing and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Time Publishing sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zhejiang JIULI and Time Publishing

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

The idea behind Zhejiang JIULI Hi tech and Time Publishing and 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 Stocks Directory module to find actively traded stocks across global markets.