Correlation Between Tengda Construction and JCHX Mining

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Can any of the company-specific risk be diversified away by investing in both Tengda Construction and JCHX Mining 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 Tengda Construction and JCHX Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tengda Construction Group and JCHX Mining Management, you can compare the effects of market volatilities on Tengda Construction and JCHX Mining 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 Tengda Construction with a short position of JCHX Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tengda Construction and JCHX Mining.

Diversification Opportunities for Tengda Construction and JCHX Mining

TengdaJCHXDiversified AwayTengdaJCHXDiversified Away100%
0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Tengda and JCHX is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tengda Construction Group and JCHX Mining Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCHX Mining Management and Tengda Construction 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 Tengda Construction Group are associated (or correlated) with JCHX Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCHX Mining Management has no effect on the direction of Tengda Construction i.e., Tengda Construction and JCHX Mining go up and down completely randomly.

Pair Corralation between Tengda Construction and JCHX Mining

Assuming the 90 days trading horizon Tengda Construction Group is expected to under-perform the JCHX Mining. But the stock apears to be less risky and, when comparing its historical volatility, Tengda Construction Group is 1.02 times less risky than JCHX Mining. The stock trades about -0.04 of its potential returns per unit of risk. The JCHX Mining Management is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4,197  in JCHX Mining Management on November 21, 2024 and sell it today you would lose (167.00) from holding JCHX Mining Management or give up 3.98% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Tengda Construction Group  vs.  JCHX Mining Management

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50510
JavaScript chart by amCharts 3.21.15600512 603979
       Timeline  
Tengda Construction 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Tengda Construction Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tengda Construction 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 3.21.15DecJanFebJanFeb2.22.32.42.52.62.72.8
JCHX Mining Management 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days JCHX Mining Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, JCHX Mining 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 3.21.15DecJanFebJanFeb3637383940414243

Tengda Construction and JCHX Mining Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.17-2.37-1.58-0.780.00.751.52.263.01 0.070.080.090.100.11
JavaScript chart by amCharts 3.21.15600512 603979
       Returns  

Pair Trading with Tengda Construction and JCHX Mining

The main advantage of trading using opposite Tengda Construction and JCHX Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tengda Construction position performs unexpectedly, JCHX Mining 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 JCHX Mining will offset losses from the drop in JCHX Mining's long position.
The idea behind Tengda Construction Group and JCHX Mining Management 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 Stocks Directory module to find actively traded stocks across global markets.

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