Correlation Between JCHX Mining and Chengdu Spaceon

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

By analyzing existing cross correlation between JCHX Mining Management and Chengdu Spaceon Electronics, you can compare the effects of market volatilities on JCHX Mining and Chengdu Spaceon 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 JCHX Mining with a short position of Chengdu Spaceon. Check out your portfolio center. Please also check ongoing floating volatility patterns of JCHX Mining and Chengdu Spaceon.

Diversification Opportunities for JCHX Mining and Chengdu Spaceon

0.2

Correlation Coefficient

JCHX Mining  Chengdu Spaceon

Modest diversification

The 3 months correlation between JCHX and Chengdu is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding JCHX Mining Management and Chengdu Spaceon Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Spaceon Elec and JCHX Mining 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 JCHX Mining Management are associated (or correlated) with Chengdu Spaceon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Spaceon Elec has no effect on the direction of JCHX Mining i.e., JCHX Mining and Chengdu Spaceon go up and down completely randomly.

Pair Corralation between JCHX Mining and Chengdu Spaceon

Assuming the 90 days trading horizon JCHX Mining Management is expected to generate 0.9 times more return on investment than Chengdu Spaceon. However, JCHX Mining Management is 1.12 times less risky than Chengdu Spaceon. It trades about 0.05 of its potential returns per unit of risk. Chengdu Spaceon Electronics is currently generating about 0.02 per unit of risk. If you would invest  2,551  in JCHX Mining Management on September 20, 2024 and sell it today you would earn a total of  1,279  from holding JCHX Mining Management or generate 50.14% return on investment over 90 days.

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

JCHX Mining Management  vs.  Chengdu Spaceon Electronics

JCHX Mining Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JCHX Mining Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Chengdu Spaceon Elec

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with JCHX Mining and Chengdu Spaceon

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

The idea behind JCHX Mining Management and Chengdu Spaceon Electronics 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.