Correlation Between 159681 and Jiangxi Sunshine

Can any of the company-specific risk be diversified away by investing in both 159681 and Jiangxi Sunshine 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 159681 and Jiangxi Sunshine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 159681 and Jiangxi Sunshine Dairy, you can compare the effects of market volatilities on 159681 and Jiangxi Sunshine 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 159681 with a short position of Jiangxi Sunshine. Check out your portfolio center. Please also check ongoing floating volatility patterns of 159681 and Jiangxi Sunshine.

Diversification Opportunities for 159681 and Jiangxi Sunshine

0.76

Correlation Coefficient

159681  Jiangxi Sunshine

Poor diversification

The 3 months correlation between 159681 and Jiangxi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding 159681 and Jiangxi Sunshine Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Sunshine Dairy and 159681 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 159681 are associated (or correlated) with Jiangxi Sunshine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Sunshine Dairy has no effect on the direction of 159681 i.e., 159681 and Jiangxi Sunshine go up and down completely randomly.

Pair Corralation between 159681 and Jiangxi Sunshine

Assuming the 90 days trading horizon 159681 is expected to under-perform the Jiangxi Sunshine. But the etf apears to be less risky and, when comparing its historical volatility, 159681 is 1.54 times less risky than Jiangxi Sunshine. The etf trades about -0.01 of its potential returns per unit of risk. The Jiangxi Sunshine Dairy is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,127  in Jiangxi Sunshine Dairy on September 16, 2024 and sell it today you would earn a total of  213.00  from holding Jiangxi Sunshine Dairy or generate 18.9% return on investment over 90 days.

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

159681  vs.  Jiangxi Sunshine Dairy

159681

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 159681 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 159681 sustained solid returns over the last few months and may actually be approaching a breakup point.

Jiangxi Sunshine Dairy

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jiangxi Sunshine Dairy are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangxi Sunshine sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 159681 and Jiangxi Sunshine

The main advantage of trading using opposite 159681 and Jiangxi Sunshine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 159681 position performs unexpectedly, Jiangxi Sunshine 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 Jiangxi Sunshine will offset losses from the drop in Jiangxi Sunshine's long position.

The idea behind 159681 and Jiangxi Sunshine Dairy 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.