Correlation Between Jiangsu Yueda and Postal Savings

Can any of the company-specific risk be diversified away by investing in both Jiangsu Yueda and Postal Savings 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 Postal Savings 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 Postal Savings Bank, you can compare the effects of market volatilities on Jiangsu Yueda and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Yueda and Postal Savings.

Diversification Opportunities for Jiangsu Yueda and Postal Savings

-0.06

Correlation Coefficient

Jiangsu Yueda  Postal Savings

Good diversification

The 3 months correlation between Jiangsu and Postal is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Yueda Investment and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Jiangsu Yueda i.e., Jiangsu Yueda and Postal Savings go up and down completely randomly.

Pair Corralation between Jiangsu Yueda and Postal Savings

Assuming the 90 days trading horizon Jiangsu Yueda Investment is expected to under-perform the Postal Savings. In addition to that, Jiangsu Yueda is 1.96 times more volatile than Postal Savings Bank. It trades about -0.02 of its total potential returns per unit of risk. Postal Savings Bank is currently generating about 0.07 per unit of volatility. If you would invest  435.00  in Postal Savings Bank on October 7, 2024 and sell it today you would earn a total of  114.00  from holding Postal Savings Bank or generate 26.21% return on investment over 90 days.

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

Jiangsu Yueda Investment  vs.  Postal Savings Bank

Jiangsu Yueda Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jiangsu Yueda Investment has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Postal Savings Bank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Postal Savings Bank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Postal Savings 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 Postal Savings

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

The idea behind Jiangsu Yueda Investment and Postal Savings Bank 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.