Correlation Between Jiangsu Yueda and Grandblue Environment

Can any of the company-specific risk be diversified away by investing in both Jiangsu Yueda and Grandblue Environment 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 Jiangsu Yueda and Grandblue Environment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jiangsu Yueda Investment and Grandblue Environment Co, you can compare the effects of market volatilities on Jiangsu Yueda and Grandblue Environment 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 Jiangsu Yueda with a short position of Grandblue Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Yueda and Grandblue Environment.

Diversification Opportunities for Jiangsu Yueda and Grandblue Environment

-0.34

Correlation Coefficient

Jiangsu Yueda  Grandblue Environment

Very good diversification

The 3 months correlation between Jiangsu and Grandblue is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Yueda Investment and Grandblue Environment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grandblue Environment and Jiangsu Yueda 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 Jiangsu Yueda Investment are associated (or correlated) with Grandblue Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grandblue Environment has no effect on the direction of Jiangsu Yueda i.e., Jiangsu Yueda and Grandblue Environment go up and down completely randomly.

Pair Corralation between Jiangsu Yueda and Grandblue Environment

Assuming the 90 days trading horizon Jiangsu Yueda Investment is expected to under-perform the Grandblue Environment. In addition to that, Jiangsu Yueda is 1.55 times more volatile than Grandblue Environment Co. It trades about -0.28 of its total potential returns per unit of risk. Grandblue Environment Co is currently generating about -0.04 per unit of volatility. If you would invest  2,225  in Grandblue Environment Co on October 14, 2024 and sell it today you would lose (31.00) from holding Grandblue Environment Co or give up 1.39% of portfolio value over 90 days.

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

Jiangsu Yueda Investment  vs.  Grandblue Environment Co

Jiangsu Yueda Investment

Risk-Adjusted Performance

2 of 100

Weak

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

Grandblue Environment

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jiangsu Yueda and Grandblue Environment

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

The idea behind Jiangsu Yueda Investment and Grandblue Environment Co 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.