Correlation Between Jinyu Bio and Ziel Home

Can any of the company-specific risk be diversified away by investing in both Jinyu Bio and Ziel Home 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 Ziel Home 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 Ziel Home Furnishing, you can compare the effects of market volatilities on Jinyu Bio and Ziel Home 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 Ziel Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinyu Bio and Ziel Home.

Diversification Opportunities for Jinyu Bio and Ziel Home

0.87

Correlation Coefficient

Jinyu Bio  Ziel Home

Very poor diversification

The 3 months correlation between Jinyu and Ziel is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Jinyu Bio Technology Co and Ziel Home Furnishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ziel Home Furnishing 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 Ziel Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ziel Home Furnishing has no effect on the direction of Jinyu Bio i.e., Jinyu Bio and Ziel Home go up and down completely randomly.

Pair Corralation between Jinyu Bio and Ziel Home

Assuming the 90 days trading horizon Jinyu Bio Technology Co is expected to under-perform the Ziel Home. But the stock apears to be less risky and, when comparing its historical volatility, Jinyu Bio Technology Co is 1.62 times less risky than Ziel Home. The stock trades about -0.04 of its potential returns per unit of risk. The Ziel Home Furnishing is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,466  in Ziel Home Furnishing on September 27, 2024 and sell it today you would lose (494.00) from holding Ziel Home Furnishing or give up 20.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	80.26%
Values	Daily Returns

Jinyu Bio Technology Co  vs.  Ziel Home Furnishing

Jinyu Bio Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jinyu Bio Technology Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Jinyu Bio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ziel Home Furnishing

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Jinyu Bio and Ziel Home

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

The idea behind Jinyu Bio Technology Co and Ziel Home Furnishing 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.