Correlation Between Jinyu Bio and Success Electronics

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

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

Diversification Opportunities for Jinyu Bio and Success Electronics

0.61

Correlation Coefficient

Jinyu Bio  Success Electronics

Poor diversification

The 3 months correlation between Jinyu and Success is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Jinyu Bio Technology Co and Success Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Success Electronics and Jinyu Bio 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 Jinyu Bio Technology Co are associated (or correlated) with Success Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Success Electronics has no effect on the direction of Jinyu Bio i.e., Jinyu Bio and Success Electronics go up and down completely randomly.

Pair Corralation between Jinyu Bio and Success Electronics

Assuming the 90 days trading horizon Jinyu Bio Technology Co is expected to generate 0.71 times more return on investment than Success Electronics. However, Jinyu Bio Technology Co is 1.42 times less risky than Success Electronics. It trades about -0.03 of its potential returns per unit of risk. Success Electronics is currently generating about -0.05 per unit of risk. If you would invest  1,025  in Jinyu Bio Technology Co on October 4, 2024 and sell it today you would lose (339.00) from holding Jinyu Bio Technology Co or give up 33.07% of portfolio value over 90 days.

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

Jinyu Bio Technology Co  vs.  Success Electronics

Jinyu Bio Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jinyu Bio Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Success Electronics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Success Electronics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Success Electronics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jinyu Bio and Success Electronics

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

The idea behind Jinyu Bio Technology Co and Success Electronics 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.