Correlation Between COFCO Joycome and Clearside Biomedical

Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and Clearside Biomedical 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 COFCO Joycome and Clearside Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COFCO Joycome Foods and Clearside Biomedical, you can compare the effects of market volatilities on COFCO Joycome and Clearside Biomedical 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 COFCO Joycome with a short position of Clearside Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and Clearside Biomedical.

Diversification Opportunities for COFCO Joycome and Clearside Biomedical

-0.48

Correlation Coefficient

COFCO Joycome  Clearside Biomedical

Very good diversification

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

Pair Corralation between COFCO Joycome and Clearside Biomedical

Assuming the 90 days horizon COFCO Joycome Foods is expected to generate 0.98 times more return on investment than Clearside Biomedical. However, COFCO Joycome Foods is 1.02 times less risky than Clearside Biomedical. It trades about 0.04 of its potential returns per unit of risk. Clearside Biomedical is currently generating about 0.04 per unit of risk. If you would invest  17.00  in COFCO Joycome Foods on December 30, 2024 and sell it today you would earn a total of  1.00  from holding COFCO Joycome Foods or generate 5.88% return on investment over 90 days.

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

COFCO Joycome Foods  vs.  Clearside Biomedical

COFCO Joycome Foods

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COFCO Joycome Foods are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, COFCO Joycome may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Clearside Biomedical

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clearside Biomedical are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Clearside Biomedical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with COFCO Joycome and Clearside Biomedical

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

The idea behind COFCO Joycome Foods and Clearside Biomedical 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..