Correlation Between Jonjee Hi and Qiming Information

Can any of the company-specific risk be diversified away by investing in both Jonjee Hi and Qiming Information 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 Jonjee Hi and Qiming Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jonjee Hi tech Industrial and Qiming Information Technology, you can compare the effects of market volatilities on Jonjee Hi and Qiming Information 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 Jonjee Hi with a short position of Qiming Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jonjee Hi and Qiming Information.

Diversification Opportunities for Jonjee Hi and Qiming Information

0.64

Correlation Coefficient

Jonjee Hi  Qiming Information

Poor diversification

The 3 months correlation between Jonjee and Qiming is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Jonjee Hi tech Industrial and Qiming Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qiming Information and Jonjee Hi 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 Jonjee Hi tech Industrial are associated (or correlated) with Qiming Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qiming Information has no effect on the direction of Jonjee Hi i.e., Jonjee Hi and Qiming Information go up and down completely randomly.

Pair Corralation between Jonjee Hi and Qiming Information

Assuming the 90 days trading horizon Jonjee Hi is expected to generate 1.63 times less return on investment than Qiming Information. But when comparing it to its historical volatility, Jonjee Hi tech Industrial is 1.89 times less risky than Qiming Information. It trades about 0.01 of its potential returns per unit of risk. Qiming Information Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,117  in Qiming Information Technology on September 29, 2024 and sell it today you would lose (89.00) from holding Qiming Information Technology or give up 4.2% of portfolio value over 90 days.

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

Jonjee Hi tech Industrial  vs.  Qiming Information Technology

Jonjee Hi tech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Qiming Information

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jonjee Hi and Qiming Information

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

The idea behind Jonjee Hi tech Industrial and Qiming Information Technology 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.