Correlation Between Jin Air and Green Cross

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Can any of the company-specific risk be diversified away by investing in both Jin Air and Green Cross 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 Jin Air and Green Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jin Air Co and Green Cross Lab, you can compare the effects of market volatilities on Jin Air and Green Cross 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 Jin Air with a short position of Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and Green Cross.

Diversification Opportunities for Jin Air and Green Cross

JinGreenDiversified AwayJinGreenDiversified Away100%
-0.08
  Correlation Coefficient

Good diversification

The 3 months correlation between Jin and Green is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and Green Cross Lab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Lab and Jin Air 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 Jin Air Co are associated (or correlated) with Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Lab has no effect on the direction of Jin Air i.e., Jin Air and Green Cross go up and down completely randomly.

Pair Corralation between Jin Air and Green Cross

Assuming the 90 days trading horizon Jin Air Co is expected to under-perform the Green Cross. But the stock apears to be less risky and, when comparing its historical volatility, Jin Air Co is 1.36 times less risky than Green Cross. The stock trades about -0.28 of its potential returns per unit of risk. The Green Cross Lab is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  2,550,000  in Green Cross Lab on September 27, 2024 and sell it today you would lose (155,000) from holding Green Cross Lab or give up 6.08% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jin Air Co  vs.  Green Cross Lab

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -30-20-10010
JavaScript chart by amCharts 3.21.15272450 144510
       Timeline  
Jin Air 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Jin Air Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jin Air is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec10,00010,50011,00011,50012,000
Green Cross Lab 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Green Cross Lab 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec22,00024,00026,00028,00030,00032,00034,00036,00038,000

Jin Air and Green Cross Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.65-3.48-2.31-1.150.01.162.323.484.64 0.0350.0400.045
JavaScript chart by amCharts 3.21.15272450 144510
       Returns  

Pair Trading with Jin Air and Green Cross

The main advantage of trading using opposite Jin Air and Green Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, Green Cross 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 Green Cross will offset losses from the drop in Green Cross' long position.
The idea behind Jin Air Co and Green Cross Lab 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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