Correlation Between Guangdong Taienkang and Jiangyin Jianghua

Can any of the company-specific risk be diversified away by investing in both Guangdong Taienkang and Jiangyin Jianghua 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 Guangdong Taienkang and Jiangyin Jianghua into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guangdong Taienkang Pharmaceutical and Jiangyin Jianghua Microelectronics, you can compare the effects of market volatilities on Guangdong Taienkang and Jiangyin Jianghua 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 Guangdong Taienkang with a short position of Jiangyin Jianghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Taienkang and Jiangyin Jianghua.

Diversification Opportunities for Guangdong Taienkang and Jiangyin Jianghua

0.0

Correlation Coefficient

Guangdong Taienkang  Jiangyin Jianghua

Pay attention - limited upside

The 3 months correlation between Guangdong and Jiangyin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Taienkang Pharmaceut and Jiangyin Jianghua Microelectro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangyin Jianghua and Guangdong Taienkang 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 Guangdong Taienkang Pharmaceutical are associated (or correlated) with Jiangyin Jianghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangyin Jianghua has no effect on the direction of Guangdong Taienkang i.e., Guangdong Taienkang and Jiangyin Jianghua go up and down completely randomly.

Pair Corralation between Guangdong Taienkang and Jiangyin Jianghua

If you would invest  1,762  in Jiangyin Jianghua Microelectronics on December 28, 2024 and sell it today you would earn a total of  144.00  from holding Jiangyin Jianghua Microelectronics or generate 8.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.75%
Values	Daily Returns

Guangdong Taienkang Pharmaceut  vs.  Jiangyin Jianghua Microelectro

Guangdong Taienkang

Risk-Adjusted Performance

Very Weak

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

Jiangyin Jianghua

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jiangyin Jianghua Microelectronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangyin Jianghua may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Guangdong Taienkang and Jiangyin Jianghua

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

The idea behind Guangdong Taienkang Pharmaceutical and Jiangyin Jianghua Microelectronics 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.