Correlation Between Northking Information and Jinyu Bio

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

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

Diversification Opportunities for Northking Information and Jinyu Bio

0.1

Correlation Coefficient

Northking Information  Jinyu Bio

Average diversification

The 3 months correlation between Northking and Jinyu is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Northking Information Technolo 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 Northking Information 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 Northking Information Technology are associated (or correlated) with Jinyu Bio. 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 Northking Information i.e., Northking Information and Jinyu Bio go up and down completely randomly.

Pair Corralation between Northking Information and Jinyu Bio

Assuming the 90 days trading horizon Northking Information Technology is expected to generate 1.4 times more return on investment than Jinyu Bio. However, Northking Information is 1.4 times more volatile than Jinyu Bio Technology Co. It trades about 0.03 of its potential returns per unit of risk. Jinyu Bio Technology Co is currently generating about -0.06 per unit of risk. If you would invest  1,170  in Northking Information Technology on October 9, 2024 and sell it today you would earn a total of  173.00  from holding Northking Information Technology or generate 14.79% return on investment over 90 days.

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

Northking Information Technolo  vs.  Jinyu Bio Technology Co

Northking Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Northking Information Technology 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.

Jinyu Bio Technology

Risk-Adjusted Performance

0 of 100

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 somewhat strong basic indicators, Jinyu Bio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Northking Information and Jinyu Bio

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

The idea behind Northking Information Technology 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.