Correlation Between COFCO Joycome and FEMALE HEALTH

Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH, you can compare the effects of market volatilities on COFCO Joycome and FEMALE HEALTH 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 FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and FEMALE HEALTH.

Diversification Opportunities for COFCO Joycome and FEMALE HEALTH

-0.01

Correlation Coefficient

COFCO Joycome  FEMALE HEALTH

Good diversification

The 3 months correlation between COFCO and FEMALE is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and FEMALE HEALTH go up and down completely randomly.

Pair Corralation between COFCO Joycome and FEMALE HEALTH

Assuming the 90 days horizon COFCO Joycome is expected to generate 3.84 times less return on investment than FEMALE HEALTH. But when comparing it to its historical volatility, COFCO Joycome Foods is 1.49 times less risky than FEMALE HEALTH. It trades about 0.02 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  58.00  in FEMALE HEALTH on September 22, 2024 and sell it today you would earn a total of  1.00  from holding FEMALE HEALTH or generate 1.72% return on investment over 90 days.

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

COFCO Joycome Foods  vs.  FEMALE HEALTH

COFCO Joycome Foods

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COFCO Joycome Foods are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, COFCO Joycome reported solid returns over the last few months and may actually be approaching a breakup point.

FEMALE HEALTH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FEMALE HEALTH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with COFCO Joycome and FEMALE HEALTH

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

The idea behind COFCO Joycome Foods and FEMALE HEALTH 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.