Correlation Between Jilin Jlu and JCET Group

Can any of the company-specific risk be diversified away by investing in both Jilin Jlu 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 Jilin Jlu and JCET Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jilin Jlu Communication and JCET Group Co, you can compare the effects of market volatilities on Jilin Jlu 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 Jilin Jlu with a short position of JCET Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jilin Jlu and JCET Group.

Diversification Opportunities for Jilin Jlu and JCET Group

0.39

Correlation Coefficient

Jilin Jlu  JCET Group

Weak diversification

The 3 months correlation between Jilin and JCET is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Jilin Jlu Communication and JCET Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCET Group and Jilin Jlu 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 Jilin Jlu Communication 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 Jilin Jlu i.e., Jilin Jlu and JCET Group go up and down completely randomly.

Pair Corralation between Jilin Jlu and JCET Group

Assuming the 90 days trading horizon Jilin Jlu is expected to generate 1.43 times less return on investment than JCET Group. In addition to that, Jilin Jlu is 1.21 times more volatile than JCET Group Co. It trades about 0.04 of its total potential returns per unit of risk. JCET Group Co is currently generating about 0.08 per unit of volatility. If you would invest  2,448  in JCET Group Co on October 7, 2024 and sell it today you would earn a total of  1,188  from holding JCET Group Co or generate 48.53% return on investment over 90 days.

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

Jilin Jlu Communication  vs.  JCET Group Co

Jilin Jlu Communication

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jilin Jlu Communication 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

JCET Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JCET Group Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, JCET Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jilin Jlu and JCET Group

The main advantage of trading using opposite Jilin Jlu and JCET Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jilin Jlu 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 Jilin Jlu Communication 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.