Correlation Between Medtecs International and Ju Teng

Can any of the company-specific risk be diversified away by investing in both Medtecs International and Ju Teng 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 Medtecs International and Ju Teng into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Medtecs International and Ju Teng International, you can compare the effects of market volatilities on Medtecs International and Ju Teng 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 Medtecs International with a short position of Ju Teng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtecs International and Ju Teng.

Diversification Opportunities for Medtecs International and Ju Teng

-0.53

Correlation Coefficient

Medtecs International  Ju Teng

Excellent diversification

The 3 months correlation between Medtecs and 9136 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Medtecs International and Ju Teng International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ju Teng International and Medtecs International 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 Medtecs International are associated (or correlated) with Ju Teng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ju Teng International has no effect on the direction of Medtecs International i.e., Medtecs International and Ju Teng go up and down completely randomly.

Pair Corralation between Medtecs International and Ju Teng

Assuming the 90 days trading horizon Medtecs International is expected to under-perform the Ju Teng. But the stock apears to be less risky and, when comparing its historical volatility, Medtecs International is 1.1 times less risky than Ju Teng. The stock trades about -0.19 of its potential returns per unit of risk. The Ju Teng International is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  652.00  in Ju Teng International on December 29, 2024 and sell it today you would earn a total of  148.00  from holding Ju Teng International or generate 22.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.25%
Values	Daily Returns

Medtecs International  vs.  Ju Teng International

Medtecs International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Medtecs International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Ju Teng International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ju Teng International are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Ju Teng showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Medtecs International and Ju Teng

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

The idea behind Medtecs International and Ju Teng International 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.