Correlation Between Markor International and Jilin Jlu

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Can any of the company-specific risk be diversified away by investing in both Markor International and Jilin Jlu 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 Jilin Jlu 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 Jilin Jlu Communication, you can compare the effects of market volatilities on Markor International and Jilin Jlu 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 Jilin Jlu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markor International and Jilin Jlu.

Diversification Opportunities for Markor International and Jilin Jlu

MarkorJilinDiversified AwayMarkorJilinDiversified Away100%
0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Markor and Jilin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Markor International Home and Jilin Jlu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin Jlu Communication 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 Jilin Jlu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin Jlu Communication has no effect on the direction of Markor International i.e., Markor International and Jilin Jlu go up and down completely randomly.

Pair Corralation between Markor International and Jilin Jlu

Assuming the 90 days trading horizon Markor International Home is expected to under-perform the Jilin Jlu. In addition to that, Markor International is 1.64 times more volatile than Jilin Jlu Communication. It trades about -0.02 of its total potential returns per unit of risk. Jilin Jlu Communication is currently generating about -0.01 per unit of volatility. If you would invest  938.00  in Jilin Jlu Communication on November 21, 2024 and sell it today you would lose (32.00) from holding Jilin Jlu Communication or give up 3.41% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Markor International Home  vs.  Jilin Jlu Communication

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-100102030
JavaScript chart by amCharts 3.21.15600337 300597
       Timeline  
Markor International Home 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Markor International Home has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Markor International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.61.822.22.42.62.83
Jilin Jlu Communication 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Jilin Jlu Communication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jilin Jlu is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7.588.599.51010.5

Markor International and Jilin Jlu Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.86-5.14-3.42-1.69-0.02741.593.244.886.538.18 0.0200.0250.0300.0350.0400.045
JavaScript chart by amCharts 3.21.15600337 300597
       Returns  

Pair Trading with Markor International and Jilin Jlu

The main advantage of trading using opposite Markor International and Jilin Jlu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Markor International position performs unexpectedly, Jilin Jlu 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 Jilin Jlu will offset losses from the drop in Jilin Jlu's long position.
The idea behind Markor International Home and Jilin Jlu Communication 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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