Correlation Between Markor International and Jiangyin Jianghua

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

Diversification Opportunities for Markor International and Jiangyin Jianghua

0.43

Correlation Coefficient

Markor International  Jiangyin Jianghua

Very weak diversification

The 3 months correlation between Markor and Jiangyin is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Markor International Home and Jiangyin Jianghua Microelectro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangyin Jianghua 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 Jiangyin Jianghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangyin Jianghua has no effect on the direction of Markor International i.e., Markor International and Jiangyin Jianghua go up and down completely randomly.

Pair Corralation between Markor International and Jiangyin Jianghua

Assuming the 90 days trading horizon Markor International Home is expected to under-perform the Jiangyin Jianghua. In addition to that, Markor International is 1.14 times more volatile than Jiangyin Jianghua Microelectronics. It trades about -0.03 of its total potential returns per unit of risk. Jiangyin Jianghua Microelectronics is currently generating about -0.03 per unit of volatility. If you would invest  1,792  in Jiangyin Jianghua Microelectronics on December 26, 2024 and sell it today you would lose (93.00) from holding Jiangyin Jianghua Microelectronics or give up 5.19% 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.  Jiangyin Jianghua Microelectro

Markor International Home

Risk-Adjusted Performance

Very Weak

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.

Jiangyin Jianghua

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jiangyin Jianghua Microelectronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jiangyin Jianghua is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Markor International and Jiangyin Jianghua

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

The idea behind Markor International Home and Jiangyin Jianghua Microelectronics 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.