Correlation Between CareRay Digital and JuneYao Dairy

Can any of the company-specific risk be diversified away by investing in both CareRay Digital and JuneYao Dairy 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 CareRay Digital and JuneYao Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CareRay Digital Medical and JuneYao Dairy Co, you can compare the effects of market volatilities on CareRay Digital and JuneYao Dairy 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 CareRay Digital with a short position of JuneYao Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareRay Digital and JuneYao Dairy.

Diversification Opportunities for CareRay Digital and JuneYao Dairy

0.68

Correlation Coefficient

CareRay Digital  JuneYao Dairy

Poor diversification

The 3 months correlation between CareRay and JuneYao is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CareRay Digital Medical and JuneYao Dairy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JuneYao Dairy and CareRay Digital 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 CareRay Digital Medical are associated (or correlated) with JuneYao Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JuneYao Dairy has no effect on the direction of CareRay Digital i.e., CareRay Digital and JuneYao Dairy go up and down completely randomly.

Pair Corralation between CareRay Digital and JuneYao Dairy

Assuming the 90 days trading horizon CareRay Digital Medical is expected to under-perform the JuneYao Dairy. But the stock apears to be less risky and, when comparing its historical volatility, CareRay Digital Medical is 1.66 times less risky than JuneYao Dairy. The stock trades about -0.39 of its potential returns per unit of risk. The JuneYao Dairy Co is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest  704.00  in JuneYao Dairy Co on October 6, 2024 and sell it today you would lose (116.00) from holding JuneYao Dairy Co or give up 16.48% of portfolio value over 90 days.

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

CareRay Digital Medical  vs.  JuneYao Dairy Co

CareRay Digital Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CareRay Digital Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

JuneYao Dairy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CareRay Digital and JuneYao Dairy

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

The idea behind CareRay Digital Medical and JuneYao Dairy 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.