Correlation Between Jilin OLED and Infore Environment

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

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

Diversification Opportunities for Jilin OLED and Infore Environment

0.25

Correlation Coefficient

Jilin OLED  Infore Environment

Modest diversification

The 3 months correlation between Jilin and Infore is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Jilin OLED Material and Infore Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infore Environment and Jilin OLED 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 Jilin OLED Material are associated (or correlated) with Infore Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infore Environment has no effect on the direction of Jilin OLED i.e., Jilin OLED and Infore Environment go up and down completely randomly.

Pair Corralation between Jilin OLED and Infore Environment

Assuming the 90 days trading horizon Jilin OLED is expected to generate 1.33 times less return on investment than Infore Environment. In addition to that, Jilin OLED is 2.2 times more volatile than Infore Environment Technology. It trades about 0.0 of its total potential returns per unit of risk. Infore Environment Technology is currently generating about 0.01 per unit of volatility. If you would invest  464.00  in Infore Environment Technology on October 24, 2024 and sell it today you would earn a total of  15.00  from holding Infore Environment Technology or generate 3.23% return on investment over 90 days.

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

Jilin OLED Material  vs.  Infore Environment Technology

Jilin OLED Material

Risk-Adjusted Performance

2 of 100

Weak

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

Infore Environment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Infore Environment Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Infore Environment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jilin OLED and Infore Environment

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

The idea behind Jilin OLED Material and Infore Environment Technology 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.