Correlation Between Jahen Household and Hunan TV

Can any of the company-specific risk be diversified away by investing in both Jahen Household and Hunan TV 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 Jahen Household and Hunan TV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jahen Household Products and Hunan TV Broadcast, you can compare the effects of market volatilities on Jahen Household and Hunan TV 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 Jahen Household with a short position of Hunan TV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahen Household and Hunan TV.

Diversification Opportunities for Jahen Household and Hunan TV

0.61

Correlation Coefficient

Jahen Household  Hunan TV

Poor diversification

The 3 months correlation between Jahen and Hunan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Jahen Household Products and Hunan TV Broadcast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan TV Broadcast and Jahen Household 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 Jahen Household Products are associated (or correlated) with Hunan TV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan TV Broadcast has no effect on the direction of Jahen Household i.e., Jahen Household and Hunan TV go up and down completely randomly.

Pair Corralation between Jahen Household and Hunan TV

Assuming the 90 days trading horizon Jahen Household Products is expected to generate 1.98 times more return on investment than Hunan TV. However, Jahen Household is 1.98 times more volatile than Hunan TV Broadcast. It trades about 0.0 of its potential returns per unit of risk. Hunan TV Broadcast is currently generating about -0.25 per unit of risk. If you would invest  1,634  in Jahen Household Products on October 3, 2024 and sell it today you would lose (54.00) from holding Jahen Household Products or give up 3.3% of portfolio value over 90 days.

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

Jahen Household Products  vs.  Hunan TV Broadcast

Jahen Household Products

Risk-Adjusted Performance

1 of 100

Weak

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

Hunan TV Broadcast

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hunan TV Broadcast are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hunan TV may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jahen Household and Hunan TV

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

The idea behind Jahen Household Products and Hunan TV Broadcast 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.