Correlation Between Montage Technology and Jinzai Food

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

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

Diversification Opportunities for Montage Technology and Jinzai Food

-0.43

Correlation Coefficient

Montage Technology  Jinzai Food

Very good diversification

The 3 months correlation between Montage and Jinzai is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Montage Technology Co 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 Montage Technology 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 Montage Technology Co 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 Montage Technology i.e., Montage Technology and Jinzai Food go up and down completely randomly.

Pair Corralation between Montage Technology and Jinzai Food

Assuming the 90 days trading horizon Montage Technology Co is expected to generate 1.45 times more return on investment than Jinzai Food. However, Montage Technology is 1.45 times more volatile than Jinzai Food Group. It trades about 0.03 of its potential returns per unit of risk. Jinzai Food Group is currently generating about -0.08 per unit of risk. If you would invest  7,241  in Montage Technology Co on December 25, 2024 and sell it today you would earn a total of  249.00  from holding Montage Technology Co or generate 3.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.28%
Values	Daily Returns

Montage Technology Co  vs.  Jinzai Food Group

Montage Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Montage Technology Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Montage Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Jinzai Food Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jinzai Food Group 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.

Pair Trading with Montage Technology and Jinzai Food

The main advantage of trading using opposite Montage Technology and Jinzai Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Montage Technology 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 Montage Technology Co 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.