Correlation Between Shanghai Rightongene and JCET Group

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

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

Diversification Opportunities for Shanghai Rightongene and JCET Group

0.18

Correlation Coefficient

Shanghai Rightongene  JCET Group

Average diversification

The 3 months correlation between Shanghai and JCET is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rightongene Biotechno and JCET Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCET Group and Shanghai Rightongene 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 Rightongene Biotechnology are associated (or correlated) with JCET Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCET Group has no effect on the direction of Shanghai Rightongene i.e., Shanghai Rightongene and JCET Group go up and down completely randomly.

Pair Corralation between Shanghai Rightongene and JCET Group

Assuming the 90 days trading horizon Shanghai Rightongene Biotechnology is expected to under-perform the JCET Group. In addition to that, Shanghai Rightongene is 1.2 times more volatile than JCET Group Co. It trades about -0.04 of its total potential returns per unit of risk. JCET Group Co is currently generating about 0.05 per unit of volatility. If you would invest  2,743  in JCET Group Co on October 23, 2024 and sell it today you would earn a total of  1,419  from holding JCET Group Co or generate 51.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Shanghai Rightongene Biotechno  vs.  JCET Group Co

Shanghai Rightongene

Risk-Adjusted Performance

2 of 100

Weak

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

JCET Group

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Shanghai Rightongene and JCET Group

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

The idea behind Shanghai Rightongene Biotechnology and JCET Group Co 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.