Correlation Between ShuYu Civilian and Jiangsu Shuangxing

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Can any of the company-specific risk be diversified away by investing in both ShuYu Civilian and Jiangsu Shuangxing 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 ShuYu Civilian and Jiangsu Shuangxing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ShuYu Civilian Pharmacy and Jiangsu Shuangxing Color, you can compare the effects of market volatilities on ShuYu Civilian and Jiangsu Shuangxing 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 ShuYu Civilian with a short position of Jiangsu Shuangxing. Check out your portfolio center. Please also check ongoing floating volatility patterns of ShuYu Civilian and Jiangsu Shuangxing.

Diversification Opportunities for ShuYu Civilian and Jiangsu Shuangxing

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between ShuYu and Jiangsu is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ShuYu Civilian Pharmacy and Jiangsu Shuangxing Color in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Shuangxing Color and ShuYu Civilian 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 ShuYu Civilian Pharmacy are associated (or correlated) with Jiangsu Shuangxing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Shuangxing Color has no effect on the direction of ShuYu Civilian i.e., ShuYu Civilian and Jiangsu Shuangxing go up and down completely randomly.

Pair Corralation between ShuYu Civilian and Jiangsu Shuangxing

Assuming the 90 days trading horizon ShuYu Civilian Pharmacy is expected to generate 1.63 times more return on investment than Jiangsu Shuangxing. However, ShuYu Civilian is 1.63 times more volatile than Jiangsu Shuangxing Color. It trades about -0.04 of its potential returns per unit of risk. Jiangsu Shuangxing Color is currently generating about -0.09 per unit of risk. If you would invest  1,356  in ShuYu Civilian Pharmacy on October 8, 2024 and sell it today you would lose (237.00) from holding ShuYu Civilian Pharmacy or give up 17.48% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

ShuYu Civilian Pharmacy  vs.  Jiangsu Shuangxing Color

 Performance 
       Timeline  
ShuYu Civilian Pharmacy 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ShuYu Civilian Pharmacy 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.
Jiangsu Shuangxing Color 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Jiangsu Shuangxing Color 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.

ShuYu Civilian and Jiangsu Shuangxing Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ShuYu Civilian and Jiangsu Shuangxing

The main advantage of trading using opposite ShuYu Civilian and Jiangsu Shuangxing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ShuYu Civilian position performs unexpectedly, Jiangsu Shuangxing 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 Jiangsu Shuangxing will offset losses from the drop in Jiangsu Shuangxing's long position.
The idea behind ShuYu Civilian Pharmacy and Jiangsu Shuangxing Color 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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