Correlation Between Caitong Securities and JiShi Media

Can any of the company-specific risk be diversified away by investing in both Caitong Securities and JiShi Media 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 Caitong Securities and JiShi Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Caitong Securities Co and JiShi Media Co, you can compare the effects of market volatilities on Caitong Securities and JiShi Media 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 Caitong Securities with a short position of JiShi Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caitong Securities and JiShi Media.

Diversification Opportunities for Caitong Securities and JiShi Media

0.65

Correlation Coefficient

Caitong Securities  JiShi Media

Poor diversification

The 3 months correlation between Caitong and JiShi is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Caitong Securities Co and JiShi Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JiShi Media and Caitong Securities 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 Caitong Securities Co are associated (or correlated) with JiShi Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JiShi Media has no effect on the direction of Caitong Securities i.e., Caitong Securities and JiShi Media go up and down completely randomly.

Pair Corralation between Caitong Securities and JiShi Media

Assuming the 90 days trading horizon Caitong Securities Co is expected to under-perform the JiShi Media. But the stock apears to be less risky and, when comparing its historical volatility, Caitong Securities Co is 2.21 times less risky than JiShi Media. The stock trades about -0.06 of its potential returns per unit of risk. The JiShi Media Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  187.00  in JiShi Media Co on December 26, 2024 and sell it today you would earn a total of  6.00  from holding JiShi Media Co or generate 3.21% return on investment over 90 days.

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

Caitong Securities Co  vs.  JiShi Media Co

Caitong Securities

Risk-Adjusted Performance

Very Weak

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

JiShi Media

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JiShi Media Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JiShi Media may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Caitong Securities and JiShi Media

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

The idea behind Caitong Securities Co and JiShi Media 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.