Correlation Between Jiangsu Phoenix and Chengdu B

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

By analyzing existing cross correlation between Jiangsu Phoenix Publishing and Chengdu B ray Media, you can compare the effects of market volatilities on Jiangsu Phoenix and Chengdu B 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 Phoenix with a short position of Chengdu B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Phoenix and Chengdu B.

Diversification Opportunities for Jiangsu Phoenix and Chengdu B

0.38

Correlation Coefficient

Jiangsu Phoenix  Chengdu B

Weak diversification

The 3 months correlation between Jiangsu and Chengdu is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Phoenix Publishing and Chengdu B ray Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu B ray and Jiangsu Phoenix 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 Phoenix Publishing are associated (or correlated) with Chengdu B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu B ray has no effect on the direction of Jiangsu Phoenix i.e., Jiangsu Phoenix and Chengdu B go up and down completely randomly.

Pair Corralation between Jiangsu Phoenix and Chengdu B

Assuming the 90 days trading horizon Jiangsu Phoenix Publishing is expected to generate 0.66 times more return on investment than Chengdu B. However, Jiangsu Phoenix Publishing is 1.52 times less risky than Chengdu B. It trades about -0.11 of its potential returns per unit of risk. Chengdu B ray Media is currently generating about -0.19 per unit of risk. If you would invest  1,102  in Jiangsu Phoenix Publishing on October 24, 2024 and sell it today you would lose (55.00) from holding Jiangsu Phoenix Publishing or give up 4.99% of portfolio value over 90 days.

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

Jiangsu Phoenix Publishing  vs.  Chengdu B ray Media

Jiangsu Phoenix Publ

Risk-Adjusted Performance

0 of 100

Very Weak

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

Chengdu B ray

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Jiangsu Phoenix and Chengdu B

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

The idea behind Jiangsu Phoenix Publishing and Chengdu B ray Media 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.