Correlation Between Jiangsu Xinri and V V

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

By analyzing existing cross correlation between Jiangsu Xinri E Vehicle and V V Food, you can compare the effects of market volatilities on Jiangsu Xinri and V V 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 Xinri with a short position of V V. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Xinri and V V.

Diversification Opportunities for Jiangsu Xinri and V V

0.6

Correlation Coefficient

Jiangsu Xinri  V V

Poor diversification

The 3 months correlation between Jiangsu and 600300 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Xinri E Vehicle and V V Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V V Food and Jiangsu Xinri 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 Xinri E Vehicle are associated (or correlated) with V V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V V Food has no effect on the direction of Jiangsu Xinri i.e., Jiangsu Xinri and V V go up and down completely randomly.

Pair Corralation between Jiangsu Xinri and V V

Assuming the 90 days trading horizon Jiangsu Xinri E Vehicle is expected to under-perform the V V. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Xinri E Vehicle is 1.31 times less risky than V V. The stock trades about -0.04 of its potential returns per unit of risk. The V V Food is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  271.00  in V V Food on October 24, 2024 and sell it today you would earn a total of  33.00  from holding V V Food or generate 12.18% return on investment over 90 days.

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

Jiangsu Xinri E Vehicle  vs.  V V Food

Jiangsu Xinri E

Risk-Adjusted Performance

0 of 100

Very Weak

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

V V Food

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in V V Food are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V V sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiangsu Xinri and V V

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

The idea behind Jiangsu Xinri E Vehicle and V V Food 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 Transaction History module to view history of all your transactions and understand their impact on performance.