Correlation Between JD HEALTH and Superior Plus

Can any of the company-specific risk be diversified away by investing in both JD HEALTH and Superior Plus 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 JD HEALTH and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JD HEALTH INTL and Superior Plus Corp, you can compare the effects of market volatilities on JD HEALTH and Superior Plus 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 JD HEALTH with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD HEALTH and Superior Plus.

Diversification Opportunities for JD HEALTH and Superior Plus

0.37

Correlation Coefficient

JD HEALTH  Superior Plus

Weak diversification

The 3 months correlation between 8ZN and Superior is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding JD HEALTH INTL and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and JD HEALTH 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 JD HEALTH INTL are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of JD HEALTH i.e., JD HEALTH and Superior Plus go up and down completely randomly.

Pair Corralation between JD HEALTH and Superior Plus

Assuming the 90 days horizon JD HEALTH INTL is expected to under-perform the Superior Plus. In addition to that, JD HEALTH is 1.58 times more volatile than Superior Plus Corp. It trades about -0.03 of its total potential returns per unit of risk. Superior Plus Corp is currently generating about -0.02 per unit of volatility. If you would invest  616.00  in Superior Plus Corp on October 11, 2024 and sell it today you would lose (184.00) from holding Superior Plus Corp or give up 29.87% of portfolio value over 90 days.

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

JD HEALTH INTL  vs.  Superior Plus Corp

JD HEALTH INTL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JD HEALTH INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, JD HEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Superior Plus is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JD HEALTH and Superior Plus

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

The idea behind JD HEALTH INTL and Superior Plus Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.