Correlation Between Jiangsu Bioperfectus and Sanquan Food

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

By analyzing existing cross correlation between Jiangsu Bioperfectus Technologies and Sanquan Food Co, you can compare the effects of market volatilities on Jiangsu Bioperfectus and Sanquan Food 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 Jiangsu Bioperfectus with a short position of Sanquan Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Bioperfectus and Sanquan Food.

Diversification Opportunities for Jiangsu Bioperfectus and Sanquan Food

-0.47

Correlation Coefficient

Jiangsu Bioperfectus  Sanquan Food

Very good diversification

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

Pair Corralation between Jiangsu Bioperfectus and Sanquan Food

Assuming the 90 days trading horizon Jiangsu Bioperfectus Technologies is expected to under-perform the Sanquan Food. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Bioperfectus Technologies is 1.18 times less risky than Sanquan Food. The stock trades about -0.28 of its potential returns per unit of risk. The Sanquan Food Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,122  in Sanquan Food Co on October 6, 2024 and sell it today you would earn a total of  89.00  from holding Sanquan Food Co or generate 7.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.73%
Values	Daily Returns

Jiangsu Bioperfectus Technolog  vs.  Sanquan Food Co

Jiangsu Bioperfectus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jiangsu Bioperfectus Technologies 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.

Sanquan Food

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sanquan Food Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sanquan Food is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jiangsu Bioperfectus and Sanquan Food

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

The idea behind Jiangsu Bioperfectus Technologies and Sanquan Food 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.