Correlation Between Jiangsu Broadcasting and Biwin Storage

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

By analyzing existing cross correlation between Jiangsu Broadcasting Cable and Biwin Storage Technology, you can compare the effects of market volatilities on Jiangsu Broadcasting and Biwin Storage 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 Broadcasting with a short position of Biwin Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Broadcasting and Biwin Storage.

Diversification Opportunities for Jiangsu Broadcasting and Biwin Storage

0.16

Correlation Coefficient

Jiangsu Broadcasting  Biwin Storage

Average diversification

The 3 months correlation between Jiangsu and Biwin is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Broadcasting Cable and Biwin Storage Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biwin Storage Technology and Jiangsu Broadcasting 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 Broadcasting Cable are associated (or correlated) with Biwin Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biwin Storage Technology has no effect on the direction of Jiangsu Broadcasting i.e., Jiangsu Broadcasting and Biwin Storage go up and down completely randomly.

Pair Corralation between Jiangsu Broadcasting and Biwin Storage

Assuming the 90 days trading horizon Jiangsu Broadcasting is expected to generate 3.25 times less return on investment than Biwin Storage. But when comparing it to its historical volatility, Jiangsu Broadcasting Cable is 1.29 times less risky than Biwin Storage. It trades about 0.02 of its potential returns per unit of risk. Biwin Storage Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  7,060  in Biwin Storage Technology on December 24, 2024 and sell it today you would earn a total of  220.00  from holding Biwin Storage Technology or generate 3.12% return on investment over 90 days.

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

Jiangsu Broadcasting Cable  vs.  Biwin Storage Technology

Jiangsu Broadcasting

Risk-Adjusted Performance

Very Weak

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

Biwin Storage Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Biwin Storage Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Biwin Storage may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Jiangsu Broadcasting and Biwin Storage

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

The idea behind Jiangsu Broadcasting Cable and Biwin Storage 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.