Correlation Between Niutech Environment and Jointo Energy

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

By analyzing existing cross correlation between Niutech Environment Technology and Jointo Energy Investment, you can compare the effects of market volatilities on Niutech Environment and Jointo Energy 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 Niutech Environment with a short position of Jointo Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niutech Environment and Jointo Energy.

Diversification Opportunities for Niutech Environment and Jointo Energy

0.47

Correlation Coefficient

Niutech Environment  Jointo Energy

Very weak diversification

The 3 months correlation between Niutech and Jointo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Niutech Environment Technology and Jointo Energy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jointo Energy Investment and Niutech Environment 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 Niutech Environment Technology are associated (or correlated) with Jointo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jointo Energy Investment has no effect on the direction of Niutech Environment i.e., Niutech Environment and Jointo Energy go up and down completely randomly.

Pair Corralation between Niutech Environment and Jointo Energy

Assuming the 90 days trading horizon Niutech Environment Technology is expected to under-perform the Jointo Energy. But the stock apears to be less risky and, when comparing its historical volatility, Niutech Environment Technology is 1.37 times less risky than Jointo Energy. The stock trades about -0.1 of its potential returns per unit of risk. The Jointo Energy Investment is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  513.00  in Jointo Energy Investment on September 30, 2024 and sell it today you would earn a total of  100.00  from holding Jointo Energy Investment or generate 19.49% return on investment over 90 days.

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

Niutech Environment Technology  vs.  Jointo Energy Investment

Niutech Environment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Niutech Environment Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Niutech Environment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jointo Energy Investment

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jointo Energy Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jointo Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Niutech Environment and Jointo Energy

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

The idea behind Niutech Environment Technology and Jointo Energy Investment 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.