Correlation Between Zhejiang Kingland and Juneyao Airlines

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

By analyzing existing cross correlation between Zhejiang Kingland Pipeline and Juneyao Airlines, you can compare the effects of market volatilities on Zhejiang Kingland and Juneyao Airlines 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 Kingland with a short position of Juneyao Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Kingland and Juneyao Airlines.

Diversification Opportunities for Zhejiang Kingland and Juneyao Airlines

-0.14

Correlation Coefficient

Zhejiang Kingland  Juneyao Airlines

Good diversification

The 3 months correlation between Zhejiang and Juneyao is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Kingland Pipeline and Juneyao Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juneyao Airlines and Zhejiang Kingland 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 Kingland Pipeline are associated (or correlated) with Juneyao Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juneyao Airlines has no effect on the direction of Zhejiang Kingland i.e., Zhejiang Kingland and Juneyao Airlines go up and down completely randomly.

Pair Corralation between Zhejiang Kingland and Juneyao Airlines

Assuming the 90 days trading horizon Zhejiang Kingland Pipeline is expected to under-perform the Juneyao Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang Kingland Pipeline is 1.13 times less risky than Juneyao Airlines. The stock trades about -0.16 of its potential returns per unit of risk. The Juneyao Airlines is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,170  in Juneyao Airlines on October 12, 2024 and sell it today you would earn a total of  111.00  from holding Juneyao Airlines or generate 9.49% return on investment over 90 days.

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

Zhejiang Kingland Pipeline  vs.  Juneyao Airlines

Zhejiang Kingland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhejiang Kingland Pipeline has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Juneyao Airlines

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Juneyao Airlines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Juneyao Airlines may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Zhejiang Kingland and Juneyao Airlines

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

The idea behind Zhejiang Kingland Pipeline and Juneyao Airlines 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.