Correlation Between Markor International and Jiangxi Selon

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

By analyzing existing cross correlation between Markor International Home and Jiangxi Selon Industrial, you can compare the effects of market volatilities on Markor International and Jiangxi Selon 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 Markor International with a short position of Jiangxi Selon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markor International and Jiangxi Selon.

Diversification Opportunities for Markor International and Jiangxi Selon

0.53

Correlation Coefficient

Markor International  Jiangxi Selon

Very weak diversification

The 3 months correlation between Markor and Jiangxi is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Markor International Home and Jiangxi Selon Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Selon Industrial and Markor International 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 Markor International Home are associated (or correlated) with Jiangxi Selon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Selon Industrial has no effect on the direction of Markor International i.e., Markor International and Jiangxi Selon go up and down completely randomly.

Pair Corralation between Markor International and Jiangxi Selon

Assuming the 90 days trading horizon Markor International Home is expected to under-perform the Jiangxi Selon. But the stock apears to be less risky and, when comparing its historical volatility, Markor International Home is 1.08 times less risky than Jiangxi Selon. The stock trades about -0.02 of its potential returns per unit of risk. The Jiangxi Selon Industrial is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,091  in Jiangxi Selon Industrial on October 15, 2024 and sell it today you would lose (290.00) from holding Jiangxi Selon Industrial or give up 26.58% of portfolio value over 90 days.

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

Markor International Home  vs.  Jiangxi Selon Industrial

Markor International Home

Risk-Adjusted Performance

3 of 100

Insignificant

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

Jiangxi Selon Industrial

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jiangxi Selon Industrial are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangxi Selon sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Markor International and Jiangxi Selon

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

The idea behind Markor International Home and Jiangxi Selon Industrial 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..