Correlation Between Shanghai Junshi and V V

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

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

Diversification Opportunities for Shanghai Junshi and V V

0.01

Correlation Coefficient

Shanghai Junshi  V V

Significant diversification

The 3 months correlation between Shanghai and 600300 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Junshi Biosciences and V V Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V V Food and Shanghai Junshi 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 Shanghai Junshi Biosciences are associated (or correlated) with V V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V V Food has no effect on the direction of Shanghai Junshi i.e., Shanghai Junshi and V V go up and down completely randomly.

Pair Corralation between Shanghai Junshi and V V

Assuming the 90 days trading horizon Shanghai Junshi Biosciences is expected to under-perform the V V. In addition to that, Shanghai Junshi is 1.45 times more volatile than V V Food. It trades about -0.06 of its total potential returns per unit of risk. V V Food is currently generating about 0.01 per unit of volatility. If you would invest  332.00  in V V Food on October 4, 2024 and sell it today you would lose (10.00) from holding V V Food or give up 3.01% of portfolio value over 90 days.

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

Shanghai Junshi Biosciences  vs.  V V Food

Shanghai Junshi Bios

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shanghai Junshi Biosciences 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

V V Food

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Shanghai Junshi and V V

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

The idea behind Shanghai Junshi Biosciences and V V Food 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.