Correlation Between Jinhe Biotechnology and Grandblue Environment

Can any of the company-specific risk be diversified away by investing in both Jinhe Biotechnology and Grandblue Environment 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 Jinhe Biotechnology and Grandblue Environment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jinhe Biotechnology Co and Grandblue Environment Co, you can compare the effects of market volatilities on Jinhe Biotechnology and Grandblue Environment 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 Jinhe Biotechnology with a short position of Grandblue Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and Grandblue Environment.

Diversification Opportunities for Jinhe Biotechnology and Grandblue Environment

0.23

Correlation Coefficient

Jinhe Biotechnology  Grandblue Environment

Modest diversification

The 3 months correlation between Jinhe and Grandblue is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co and Grandblue Environment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grandblue Environment and Jinhe Biotechnology 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 Jinhe Biotechnology Co are associated (or correlated) with Grandblue Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grandblue Environment has no effect on the direction of Jinhe Biotechnology i.e., Jinhe Biotechnology and Grandblue Environment go up and down completely randomly.

Pair Corralation between Jinhe Biotechnology and Grandblue Environment

Assuming the 90 days trading horizon Jinhe Biotechnology Co is expected to under-perform the Grandblue Environment. In addition to that, Jinhe Biotechnology is 1.81 times more volatile than Grandblue Environment Co. It trades about -0.15 of its total potential returns per unit of risk. Grandblue Environment Co is currently generating about 0.26 per unit of volatility. If you would invest  2,191  in Grandblue Environment Co on October 6, 2024 and sell it today you would earn a total of  174.00  from holding Grandblue Environment Co or generate 7.94% return on investment over 90 days.

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

Jinhe Biotechnology Co  vs.  Grandblue Environment Co

Jinhe Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

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

Grandblue Environment

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with Jinhe Biotechnology and Grandblue Environment

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

The idea behind Jinhe Biotechnology Co and Grandblue Environment 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.