Correlation Between Springsnow Food and Jinzai Food

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

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

Diversification Opportunities for Springsnow Food and Jinzai Food

0.24

Correlation Coefficient

Springsnow Food  Jinzai Food

Modest diversification

The 3 months correlation between Springsnow and Jinzai is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Springsnow Food Group and Jinzai Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinzai Food Group and Springsnow Food 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 Springsnow Food Group are associated (or correlated) with Jinzai Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinzai Food Group has no effect on the direction of Springsnow Food i.e., Springsnow Food and Jinzai Food go up and down completely randomly.

Pair Corralation between Springsnow Food and Jinzai Food

Assuming the 90 days trading horizon Springsnow Food Group is expected to under-perform the Jinzai Food. In addition to that, Springsnow Food is 1.22 times more volatile than Jinzai Food Group. It trades about -0.19 of its total potential returns per unit of risk. Jinzai Food Group is currently generating about 0.08 per unit of volatility. If you would invest  1,288  in Jinzai Food Group on October 9, 2024 and sell it today you would earn a total of  52.00  from holding Jinzai Food Group or generate 4.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Springsnow Food Group  vs.  Jinzai Food Group

Springsnow Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jinzai Food Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jinzai Food Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Jinzai Food is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Springsnow Food and Jinzai Food

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

The idea behind Springsnow Food Group and Jinzai Food Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.