Correlation Between Jafron Biomedical and Guangzhou Boji

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

By analyzing existing cross correlation between Jafron Biomedical Co and Guangzhou Boji Medical, you can compare the effects of market volatilities on Jafron Biomedical and Guangzhou Boji 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 Jafron Biomedical with a short position of Guangzhou Boji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jafron Biomedical and Guangzhou Boji.

Diversification Opportunities for Jafron Biomedical and Guangzhou Boji

-0.17

Correlation Coefficient

Jafron Biomedical  Guangzhou Boji

Good diversification

The 3 months correlation between Jafron and Guangzhou is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jafron Biomedical Co and Guangzhou Boji Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Boji Medical and Jafron Biomedical 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 Jafron Biomedical Co are associated (or correlated) with Guangzhou Boji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Boji Medical has no effect on the direction of Jafron Biomedical i.e., Jafron Biomedical and Guangzhou Boji go up and down completely randomly.

Pair Corralation between Jafron Biomedical and Guangzhou Boji

Assuming the 90 days trading horizon Jafron Biomedical is expected to generate 6.68 times less return on investment than Guangzhou Boji. But when comparing it to its historical volatility, Jafron Biomedical Co is 1.26 times less risky than Guangzhou Boji. It trades about 0.0 of its potential returns per unit of risk. Guangzhou Boji Medical is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,108  in Guangzhou Boji Medical on December 2, 2024 and sell it today you would lose (169.00) from holding Guangzhou Boji Medical or give up 15.25% of portfolio value over 90 days.

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

Jafron Biomedical Co  vs.  Guangzhou Boji Medical

Jafron Biomedical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jafron Biomedical Co 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Guangzhou Boji Medical

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guangzhou Boji Medical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Guangzhou Boji is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jafron Biomedical and Guangzhou Boji

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

The idea behind Jafron Biomedical Co and Guangzhou Boji Medical 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.