Correlation Between Jinsanjiang (Zhaoqing) and Telling Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both Jinsanjiang (Zhaoqing) and Telling Telecommunicatio 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 Jinsanjiang (Zhaoqing) and Telling Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jinsanjiang Silicon Material and Telling Telecommunication Holding, you can compare the effects of market volatilities on Jinsanjiang (Zhaoqing) and Telling Telecommunicatio 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 Jinsanjiang (Zhaoqing) with a short position of Telling Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinsanjiang (Zhaoqing) and Telling Telecommunicatio.

Diversification Opportunities for Jinsanjiang (Zhaoqing) and Telling Telecommunicatio

0.65

Correlation Coefficient

Jinsanjiang (Zhaoqing)  Telling Telecommunicatio

Poor diversification

The 3 months correlation between Jinsanjiang and Telling is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Jinsanjiang Silicon Material and Telling Telecommunication Hold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telling Telecommunicatio and Jinsanjiang (Zhaoqing) 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 Jinsanjiang Silicon Material are associated (or correlated) with Telling Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telling Telecommunicatio has no effect on the direction of Jinsanjiang (Zhaoqing) i.e., Jinsanjiang (Zhaoqing) and Telling Telecommunicatio go up and down completely randomly.

Pair Corralation between Jinsanjiang (Zhaoqing) and Telling Telecommunicatio

Assuming the 90 days trading horizon Jinsanjiang Silicon Material is expected to generate 0.86 times more return on investment than Telling Telecommunicatio. However, Jinsanjiang Silicon Material is 1.17 times less risky than Telling Telecommunicatio. It trades about -0.02 of its potential returns per unit of risk. Telling Telecommunication Holding is currently generating about -0.06 per unit of risk. If you would invest  1,281  in Jinsanjiang Silicon Material on December 27, 2024 and sell it today you would lose (76.00) from holding Jinsanjiang Silicon Material or give up 5.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.28%
Values	Daily Returns

Jinsanjiang Silicon Material  vs.  Telling Telecommunication Hold

Jinsanjiang (Zhaoqing)

Risk-Adjusted Performance

Very Weak

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

Telling Telecommunicatio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telling Telecommunication Holding 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Jinsanjiang (Zhaoqing) and Telling Telecommunicatio

The main advantage of trading using opposite Jinsanjiang (Zhaoqing) and Telling Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinsanjiang (Zhaoqing) position performs unexpectedly, Telling Telecommunicatio 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 Telling Telecommunicatio will offset losses from the drop in Telling Telecommunicatio's long position.

The idea behind Jinsanjiang Silicon Material and Telling Telecommunication Holding 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.