Correlation Between Jinro Distillers and Adaptive Plasma

Can any of the company-specific risk be diversified away by investing in both Jinro Distillers and Adaptive Plasma 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 Jinro Distillers and Adaptive Plasma into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Jinro Distillers and Adaptive Plasma

0.48

Correlation Coefficient

Jinro Distillers  Adaptive Plasma

Very weak diversification

The 3 months correlation between Jinro and Adaptive is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co and Adaptive Plasma Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Plasma Tech and Jinro Distillers 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 Jinro Distillers Co are associated (or correlated) with Adaptive Plasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Plasma Tech has no effect on the direction of Jinro Distillers i.e., Jinro Distillers and Adaptive Plasma go up and down completely randomly.

Pair Corralation between Jinro Distillers and Adaptive Plasma

Assuming the 90 days trading horizon Jinro Distillers Co is expected to under-perform the Adaptive Plasma. But the stock apears to be less risky and, when comparing its historical volatility, Jinro Distillers Co is 3.72 times less risky than Adaptive Plasma. The stock trades about -0.03 of its potential returns per unit of risk. The Adaptive Plasma Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  672,000  in Adaptive Plasma Technology on September 19, 2024 and sell it today you would earn a total of  44,000  from holding Adaptive Plasma Technology or generate 6.55% return on investment over 90 days.

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

Jinro Distillers Co  vs.  Adaptive Plasma Technology

Jinro Distillers

Risk-Adjusted Performance

0 of 100

Very Weak

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

Adaptive Plasma Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adaptive Plasma 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Jinro Distillers and Adaptive Plasma

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

The idea behind Jinro Distillers Co and Adaptive Plasma Technology 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 Transaction History module to view history of all your transactions and understand their impact on performance.