Correlation Between Kontour Medical and Jilin Yatai

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

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

Diversification Opportunities for Kontour Medical and Jilin Yatai

0.54

Correlation Coefficient

Kontour Medical  Jilin Yatai

Very weak diversification

The 3 months correlation between Kontour and Jilin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kontour Medical Technology and Jilin Yatai Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin Yatai Group and Kontour Medical 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 Kontour Medical Technology are associated (or correlated) with Jilin Yatai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin Yatai Group has no effect on the direction of Kontour Medical i.e., Kontour Medical and Jilin Yatai go up and down completely randomly.

Pair Corralation between Kontour Medical and Jilin Yatai

Assuming the 90 days trading horizon Kontour Medical Technology is expected to under-perform the Jilin Yatai. But the stock apears to be less risky and, when comparing its historical volatility, Kontour Medical Technology is 2.6 times less risky than Jilin Yatai. The stock trades about -0.27 of its potential returns per unit of risk. The Jilin Yatai Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  215.00  in Jilin Yatai Group on October 11, 2024 and sell it today you would lose (15.00) from holding Jilin Yatai Group or give up 6.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Kontour Medical Technology  vs.  Jilin Yatai Group

Kontour Medical Tech

Risk-Adjusted Performance

4 of 100

Insignificant

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

Jilin Yatai Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jilin Yatai Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jilin Yatai sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kontour Medical and Jilin Yatai

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

The idea behind Kontour Medical Technology and Jilin Yatai 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.