Correlation Between Kangyue Technology and JCET Group

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

Diversification Opportunities for Kangyue Technology and JCET Group

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Kangyue and JCET is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kangyue Technology Co and JCET Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCET Group and Kangyue Technology 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 Kangyue Technology Co are associated (or correlated) with JCET Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCET Group has no effect on the direction of Kangyue Technology i.e., Kangyue Technology and JCET Group go up and down completely randomly.

Pair Corralation between Kangyue Technology and JCET Group

Assuming the 90 days trading horizon Kangyue Technology Co is expected to under-perform the JCET Group. In addition to that, Kangyue Technology is 1.73 times more volatile than JCET Group Co. It trades about -0.12 of its total potential returns per unit of risk. JCET Group Co is currently generating about -0.05 per unit of volatility. If you would invest  4,105  in JCET Group Co on September 22, 2024 and sell it today you would lose (107.00) from holding JCET Group Co or give up 2.61% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.65%
ValuesDaily Returns

Kangyue Technology Co  vs.  JCET Group Co

 Performance 
       Timeline  
Kangyue Technology 

Risk-Adjusted Performance

12 of 100

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

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in JCET Group Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JCET Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Kangyue Technology and JCET Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kangyue Technology and JCET Group

The main advantage of trading using opposite Kangyue Technology and JCET Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kangyue Technology position performs unexpectedly, JCET Group 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 JCET Group will offset losses from the drop in JCET Group's long position.
The idea behind Kangyue Technology Co and JCET Group Co 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.
Check out your portfolio center.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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