Correlation Between Piotech and Jinxiandai Information

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

By analyzing existing cross correlation between Piotech Inc A and Jinxiandai Information Industry, you can compare the effects of market volatilities on Piotech and Jinxiandai Information 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 Piotech with a short position of Jinxiandai Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piotech and Jinxiandai Information.

Diversification Opportunities for Piotech and Jinxiandai Information

0.35

Correlation Coefficient

Piotech  Jinxiandai Information

Weak diversification

The 3 months correlation between Piotech and Jinxiandai is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Piotech Inc A and Jinxiandai Information Industr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinxiandai Information and Piotech 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 Piotech Inc A are associated (or correlated) with Jinxiandai Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinxiandai Information has no effect on the direction of Piotech i.e., Piotech and Jinxiandai Information go up and down completely randomly.

Pair Corralation between Piotech and Jinxiandai Information

Assuming the 90 days trading horizon Piotech Inc A is expected to generate 0.44 times more return on investment than Jinxiandai Information. However, Piotech Inc A is 2.28 times less risky than Jinxiandai Information. It trades about -0.45 of its potential returns per unit of risk. Jinxiandai Information Industry is currently generating about -0.23 per unit of risk. If you would invest  18,096  in Piotech Inc A on October 10, 2024 and sell it today you would lose (3,278) from holding Piotech Inc A or give up 18.11% of portfolio value over 90 days.

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

Piotech Inc A  vs.  Jinxiandai Information Industr

Piotech Inc A

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jinxiandai Information

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Piotech and Jinxiandai Information

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

The idea behind Piotech Inc A and Jinxiandai Information Industry 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.