Correlation Between Ingentec and Jia Jie

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

By analyzing existing cross correlation between Ingentec and Jia Jie Biomedical, you can compare the effects of market volatilities on Ingentec and Jia Jie 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 Ingentec with a short position of Jia Jie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingentec and Jia Jie.

Diversification Opportunities for Ingentec and Jia Jie

0.94

Correlation Coefficient

Ingentec  Jia Jie

Almost no diversification

The 3 months correlation between Ingentec and Jia is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ingentec and Jia Jie Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jia Jie Biomedical and Ingentec 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 Ingentec are associated (or correlated) with Jia Jie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jia Jie Biomedical has no effect on the direction of Ingentec i.e., Ingentec and Jia Jie go up and down completely randomly.

Pair Corralation between Ingentec and Jia Jie

Assuming the 90 days trading horizon Ingentec is expected to generate 1.5 times less return on investment than Jia Jie. In addition to that, Ingentec is 1.16 times more volatile than Jia Jie Biomedical. It trades about 0.03 of its total potential returns per unit of risk. Jia Jie Biomedical is currently generating about 0.05 per unit of volatility. If you would invest  1,403  in Jia Jie Biomedical on October 4, 2024 and sell it today you would earn a total of  827.00  from holding Jia Jie Biomedical or generate 58.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.79%
Values	Daily Returns

Ingentec  vs.  Jia Jie Biomedical

Ingentec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ingentec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Jia Jie Biomedical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jia Jie Biomedical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Ingentec and Jia Jie

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

The idea behind Ingentec and Jia Jie Biomedical 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.