Correlation Between Ji Haw and Welltend Technology

Can any of the company-specific risk be diversified away by investing in both Ji Haw and Welltend Technology 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 Ji Haw and Welltend Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ji Haw Industrial Co and Welltend Technology Corp, you can compare the effects of market volatilities on Ji Haw and Welltend Technology 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 Ji Haw with a short position of Welltend Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ji Haw and Welltend Technology.

Diversification Opportunities for Ji Haw and Welltend Technology

0.04

Correlation Coefficient

Ji Haw  Welltend Technology

Significant diversification

The 3 months correlation between 3011 and Welltend is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ji Haw Industrial Co and Welltend Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welltend Technology Corp and Ji Haw 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 Ji Haw Industrial Co are associated (or correlated) with Welltend Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welltend Technology Corp has no effect on the direction of Ji Haw i.e., Ji Haw and Welltend Technology go up and down completely randomly.

Pair Corralation between Ji Haw and Welltend Technology

Assuming the 90 days trading horizon Ji Haw Industrial Co is expected to under-perform the Welltend Technology. But the stock apears to be less risky and, when comparing its historical volatility, Ji Haw Industrial Co is 1.24 times less risky than Welltend Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Welltend Technology Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,130  in Welltend Technology Corp on September 17, 2024 and sell it today you would earn a total of  780.00  from holding Welltend Technology Corp or generate 36.62% return on investment over 90 days.

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

Ji Haw Industrial Co  vs.  Welltend Technology Corp

Ji Haw Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ji Haw Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ji Haw is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Welltend Technology Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Welltend Technology Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Welltend Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ji Haw and Welltend Technology

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

The idea behind Ji Haw Industrial Co and Welltend Technology Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.