Correlation Between JCHX Mining and Shandong Sinoglory

Can any of the company-specific risk be diversified away by investing in both JCHX Mining and Shandong Sinoglory 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 Shandong Sinoglory 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 Shandong Sinoglory Health, you can compare the effects of market volatilities on JCHX Mining and Shandong Sinoglory 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 Shandong Sinoglory. Check out your portfolio center. Please also check ongoing floating volatility patterns of JCHX Mining and Shandong Sinoglory.

Diversification Opportunities for JCHX Mining and Shandong Sinoglory

-0.12

Correlation Coefficient

JCHX Mining  Shandong Sinoglory

Good diversification

The 3 months correlation between JCHX and Shandong is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding JCHX Mining Management and Shandong Sinoglory Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sinoglory Health 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 Shandong Sinoglory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sinoglory Health has no effect on the direction of JCHX Mining i.e., JCHX Mining and Shandong Sinoglory go up and down completely randomly.

Pair Corralation between JCHX Mining and Shandong Sinoglory

Assuming the 90 days trading horizon JCHX Mining Management is expected to generate 1.07 times more return on investment than Shandong Sinoglory. However, JCHX Mining is 1.07 times more volatile than Shandong Sinoglory Health. It trades about 0.05 of its potential returns per unit of risk. Shandong Sinoglory Health is currently generating about -0.02 per unit of risk. If you would invest  2,501  in JCHX Mining Management on September 26, 2024 and sell it today you would earn a total of  1,386  from holding JCHX Mining Management or generate 55.42% return on investment over 90 days.

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

JCHX Mining Management  vs.  Shandong Sinoglory Health

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Shandong Sinoglory Health

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shandong Sinoglory Health are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shandong Sinoglory may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JCHX Mining and Shandong Sinoglory

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

The idea behind JCHX Mining Management and Shandong Sinoglory Health 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.