Correlation Between Tianjin You and Guangzhou Jointas

Can any of the company-specific risk be diversified away by investing in both Tianjin You and Guangzhou Jointas 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 Tianjin You and Guangzhou Jointas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tianjin You Fa and Guangzhou Jointas Chemical, you can compare the effects of market volatilities on Tianjin You and Guangzhou Jointas 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 Tianjin You with a short position of Guangzhou Jointas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin You and Guangzhou Jointas.

Diversification Opportunities for Tianjin You and Guangzhou Jointas

0.0

Correlation Coefficient

Tianjin You  Guangzhou Jointas

Pay attention - limited upside

The 3 months correlation between Tianjin and Guangzhou is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin You Fa and Guangzhou Jointas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jointas and Tianjin You 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 Tianjin You Fa are associated (or correlated) with Guangzhou Jointas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jointas has no effect on the direction of Tianjin You i.e., Tianjin You and Guangzhou Jointas go up and down completely randomly.

Pair Corralation between Tianjin You and Guangzhou Jointas

If you would invest  515.00  in Guangzhou Jointas Chemical on December 27, 2024 and sell it today you would earn a total of  81.00  from holding Guangzhou Jointas Chemical or generate 15.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.75%
Values	Daily Returns

Tianjin You Fa  vs.  Guangzhou Jointas Chemical

Tianjin You Fa

Risk-Adjusted Performance

Very Weak

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

Guangzhou Jointas

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guangzhou Jointas Chemical are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guangzhou Jointas sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tianjin You and Guangzhou Jointas

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

The idea behind Tianjin You Fa and Guangzhou Jointas Chemical 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.