Correlation Between Yuan High and Jetwell Computer

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

By analyzing existing cross correlation between Yuan High Tech Development and Jetwell Computer Co, you can compare the effects of market volatilities on Yuan High and Jetwell Computer 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 Yuan High with a short position of Jetwell Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan High and Jetwell Computer.

Diversification Opportunities for Yuan High and Jetwell Computer

0.9

Correlation Coefficient

Yuan High  Jetwell Computer

Almost no diversification

The 3 months correlation between Yuan and Jetwell is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Yuan High Tech Development and Jetwell Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetwell Computer and Yuan High 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 Yuan High Tech Development are associated (or correlated) with Jetwell Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetwell Computer has no effect on the direction of Yuan High i.e., Yuan High and Jetwell Computer go up and down completely randomly.

Pair Corralation between Yuan High and Jetwell Computer

Assuming the 90 days trading horizon Yuan High Tech Development is expected to under-perform the Jetwell Computer. In addition to that, Yuan High is 1.17 times more volatile than Jetwell Computer Co. It trades about -0.01 of its total potential returns per unit of risk. Jetwell Computer Co is currently generating about 0.01 per unit of volatility. If you would invest  15,450  in Jetwell Computer Co on October 20, 2024 and sell it today you would lose (150.00) from holding Jetwell Computer Co or give up 0.97% of portfolio value over 90 days.

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

Yuan High Tech Development  vs.  Jetwell Computer Co

Yuan High Tech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jetwell Computer

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Yuan High and Jetwell Computer

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

The idea behind Yuan High Tech Development and Jetwell Computer Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.