Correlation Between Juneyao Airlines and Malion New

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

By analyzing existing cross correlation between Juneyao Airlines and Malion New Materials, you can compare the effects of market volatilities on Juneyao Airlines and Malion New 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 Juneyao Airlines with a short position of Malion New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juneyao Airlines and Malion New.

Diversification Opportunities for Juneyao Airlines and Malion New

0.21

Correlation Coefficient

Juneyao Airlines  Malion New

Modest diversification

The 3 months correlation between Juneyao and Malion is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Juneyao Airlines and Malion New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malion New Materials and Juneyao Airlines 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 Juneyao Airlines are associated (or correlated) with Malion New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malion New Materials has no effect on the direction of Juneyao Airlines i.e., Juneyao Airlines and Malion New go up and down completely randomly.

Pair Corralation between Juneyao Airlines and Malion New

Assuming the 90 days trading horizon Juneyao Airlines is expected to under-perform the Malion New. But the stock apears to be less risky and, when comparing its historical volatility, Juneyao Airlines is 1.08 times less risky than Malion New. The stock trades about -0.02 of its potential returns per unit of risk. The Malion New Materials is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  840.00  in Malion New Materials on December 26, 2024 and sell it today you would earn a total of  99.00  from holding Malion New Materials or generate 11.79% return on investment over 90 days.

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

Juneyao Airlines  vs.  Malion New Materials

Juneyao Airlines

Risk-Adjusted Performance

Very Weak

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

Malion New Materials

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Malion New Materials are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Malion New sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Juneyao Airlines and Malion New

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

The idea behind Juneyao Airlines and Malion New Materials 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.