Correlation Between Jiangsu Jinling and Youngy Health

Can any of the company-specific risk be diversified away by investing in both Jiangsu Jinling and Youngy Health 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 Jiangsu Jinling and Youngy Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jiangsu Jinling Sports and Youngy Health Co, you can compare the effects of market volatilities on Jiangsu Jinling and Youngy Health 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 Jiangsu Jinling with a short position of Youngy Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Jinling and Youngy Health.

Diversification Opportunities for Jiangsu Jinling and Youngy Health

0.88

Correlation Coefficient

Jiangsu Jinling  Youngy Health

Very poor diversification

The 3 months correlation between Jiangsu and Youngy is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Jinling Sports and Youngy Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngy Health and Jiangsu Jinling 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 Jiangsu Jinling Sports are associated (or correlated) with Youngy Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngy Health has no effect on the direction of Jiangsu Jinling i.e., Jiangsu Jinling and Youngy Health go up and down completely randomly.

Pair Corralation between Jiangsu Jinling and Youngy Health

Assuming the 90 days trading horizon Jiangsu Jinling Sports is expected to generate 1.24 times more return on investment than Youngy Health. However, Jiangsu Jinling is 1.24 times more volatile than Youngy Health Co. It trades about 0.14 of its potential returns per unit of risk. Youngy Health Co is currently generating about 0.1 per unit of risk. If you would invest  1,288  in Jiangsu Jinling Sports on December 5, 2024 and sell it today you would earn a total of  90.00  from holding Jiangsu Jinling Sports or generate 6.99% return on investment over 90 days.

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

Jiangsu Jinling Sports  vs.  Youngy Health Co

Jiangsu Jinling Sports

Risk-Adjusted Performance

Very Weak

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

Youngy Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Youngy Health Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Jiangsu Jinling and Youngy Health

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

The idea behind Jiangsu Jinling Sports and Youngy Health 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.