Correlation Between Jinlong Machinery and Meinian Onehealth

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

By analyzing existing cross correlation between Jinlong Machinery Electronic and Meinian Onehealth Healthcare, you can compare the effects of market volatilities on Jinlong Machinery and Meinian Onehealth 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 Jinlong Machinery with a short position of Meinian Onehealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinlong Machinery and Meinian Onehealth.

Diversification Opportunities for Jinlong Machinery and Meinian Onehealth

0.69

Correlation Coefficient

Jinlong Machinery  Meinian Onehealth

Poor diversification

The 3 months correlation between Jinlong and Meinian is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jinlong Machinery Electronic and Meinian Onehealth Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meinian Onehealth and Jinlong Machinery 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 Jinlong Machinery Electronic are associated (or correlated) with Meinian Onehealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meinian Onehealth has no effect on the direction of Jinlong Machinery i.e., Jinlong Machinery and Meinian Onehealth go up and down completely randomly.

Pair Corralation between Jinlong Machinery and Meinian Onehealth

Assuming the 90 days trading horizon Jinlong Machinery Electronic is expected to generate 1.85 times more return on investment than Meinian Onehealth. However, Jinlong Machinery is 1.85 times more volatile than Meinian Onehealth Healthcare. It trades about 0.03 of its potential returns per unit of risk. Meinian Onehealth Healthcare is currently generating about 0.05 per unit of risk. If you would invest  424.00  in Jinlong Machinery Electronic on October 12, 2024 and sell it today you would earn a total of  14.00  from holding Jinlong Machinery Electronic or generate 3.3% return on investment over 90 days.

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

Jinlong Machinery Electronic  vs.  Meinian Onehealth Healthcare

Jinlong Machinery

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jinlong Machinery Electronic are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jinlong Machinery may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Meinian Onehealth

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Jinlong Machinery and Meinian Onehealth

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

The idea behind Jinlong Machinery Electronic and Meinian Onehealth Healthcare 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 Stocks Directory module to find actively traded stocks across global markets.