Correlation Between Jiangsu Jinling and Oppein Home

Can any of the company-specific risk be diversified away by investing in both Jiangsu Jinling and Oppein Home 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 Oppein Home 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 Oppein Home Group, you can compare the effects of market volatilities on Jiangsu Jinling and Oppein Home 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 Oppein Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Jinling and Oppein Home.

Diversification Opportunities for Jiangsu Jinling and Oppein Home

0.94

Correlation Coefficient

Jiangsu Jinling  Oppein Home

Almost no diversification

The 3 months correlation between Jiangsu and Oppein is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Jinling Sports and Oppein Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppein Home Group 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 Oppein Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppein Home Group has no effect on the direction of Jiangsu Jinling i.e., Jiangsu Jinling and Oppein Home go up and down completely randomly.

Pair Corralation between Jiangsu Jinling and Oppein Home

Assuming the 90 days trading horizon Jiangsu Jinling Sports is expected to generate 0.74 times more return on investment than Oppein Home. However, Jiangsu Jinling Sports is 1.35 times less risky than Oppein Home. It trades about 0.29 of its potential returns per unit of risk. Oppein Home Group is currently generating about 0.14 per unit of risk. If you would invest  1,314  in Jiangsu Jinling Sports on September 5, 2024 and sell it today you would earn a total of  209.00  from holding Jiangsu Jinling Sports or generate 15.91% return on investment over 90 days.

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

Jiangsu Jinling Sports  vs.  Oppein Home Group

Jiangsu Jinling Sports

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jiangsu Jinling Sports are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangsu Jinling sustained solid returns over the last few months and may actually be approaching a breakup point.

Oppein Home Group

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oppein Home Group are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Oppein Home sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiangsu Jinling and Oppein Home

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

The idea behind Jiangsu Jinling Sports and Oppein Home Group 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .