Correlation Between International CSRC and Jia Jie

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

By analyzing existing cross correlation between International CSRC Investment and Jia Jie Biomedical, you can compare the effects of market volatilities on International CSRC and Jia Jie 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 International CSRC with a short position of Jia Jie. Check out your portfolio center. Please also check ongoing floating volatility patterns of International CSRC and Jia Jie.

Diversification Opportunities for International CSRC and Jia Jie

0.24

Correlation Coefficient

International CSRC  Jia Jie

Modest diversification

The 3 months correlation between International and Jia is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding International CSRC Investment and Jia Jie Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jia Jie Biomedical and International CSRC 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 International CSRC Investment are associated (or correlated) with Jia Jie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jia Jie Biomedical has no effect on the direction of International CSRC i.e., International CSRC and Jia Jie go up and down completely randomly.

Pair Corralation between International CSRC and Jia Jie

Assuming the 90 days trading horizon International CSRC Investment is expected to under-perform the Jia Jie. But the stock apears to be less risky and, when comparing its historical volatility, International CSRC Investment is 1.88 times less risky than Jia Jie. The stock trades about -0.1 of its potential returns per unit of risk. The Jia Jie Biomedical is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  2,185  in Jia Jie Biomedical on December 25, 2024 and sell it today you would lose (180.00) from holding Jia Jie Biomedical or give up 8.24% of portfolio value over 90 days.

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

International CSRC Investment  vs.  Jia Jie Biomedical

International CSRC

Risk-Adjusted Performance

Very Weak

Over the last 90 days International CSRC Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Jia Jie Biomedical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jia Jie Biomedical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with International CSRC and Jia Jie

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

The idea behind International CSRC Investment and Jia Jie 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.