Correlation Between Dadi Early and Ji Haw

Can any of the company-specific risk be diversified away by investing in both Dadi Early and Ji Haw 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 Dadi Early and Ji Haw into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dadi Early Childhood Education and Ji Haw Industrial Co, you can compare the effects of market volatilities on Dadi Early and Ji Haw 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 Dadi Early with a short position of Ji Haw. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dadi Early and Ji Haw.

Diversification Opportunities for Dadi Early and Ji Haw

-0.06

Correlation Coefficient

Dadi Early  Ji Haw

Good diversification

The 3 months correlation between Dadi and 3011 is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dadi Early Childhood Education and Ji Haw Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ji Haw Industrial and Dadi Early 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 Dadi Early Childhood Education are associated (or correlated) with Ji Haw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ji Haw Industrial has no effect on the direction of Dadi Early i.e., Dadi Early and Ji Haw go up and down completely randomly.

Pair Corralation between Dadi Early and Ji Haw

Assuming the 90 days trading horizon Dadi Early Childhood Education is expected to generate 0.99 times more return on investment than Ji Haw. However, Dadi Early Childhood Education is 1.01 times less risky than Ji Haw. It trades about -0.02 of its potential returns per unit of risk. Ji Haw Industrial Co is currently generating about -0.23 per unit of risk. If you would invest  2,850  in Dadi Early Childhood Education on December 5, 2024 and sell it today you would lose (110.00) from holding Dadi Early Childhood Education or give up 3.86% of portfolio value over 90 days.

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

Dadi Early Childhood Education  vs.  Ji Haw Industrial Co

Dadi Early Childhood

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dadi Early Childhood Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Dadi Early is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ji Haw Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ji Haw Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Dadi Early and Ji Haw

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

The idea behind Dadi Early Childhood Education and Ji Haw Industrial 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.