Correlation Between Ju Teng and Carnival Industrial

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

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

Diversification Opportunities for Ju Teng and Carnival Industrial

-0.09

Correlation Coefficient

Ju Teng  Carnival Industrial

Good diversification

The 3 months correlation between 9136 and Carnival is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ju Teng International and Carnival Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival Industrial Corp and Ju Teng 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 Ju Teng International are associated (or correlated) with Carnival Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival Industrial Corp has no effect on the direction of Ju Teng i.e., Ju Teng and Carnival Industrial go up and down completely randomly.

Pair Corralation between Ju Teng and Carnival Industrial

Assuming the 90 days trading horizon Ju Teng International is expected to generate 1.87 times more return on investment than Carnival Industrial. However, Ju Teng is 1.87 times more volatile than Carnival Industrial Corp. It trades about 0.17 of its potential returns per unit of risk. Carnival Industrial Corp is currently generating about -0.06 per unit of risk. If you would invest  652.00  in Ju Teng International on December 28, 2024 and sell it today you would earn a total of  149.00  from holding Ju Teng International or generate 22.85% return on investment over 90 days.

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

Ju Teng International  vs.  Carnival Industrial Corp

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 abnormal basic indicators, Ju Teng showed solid returns over the last few months and may actually be approaching a breakup point.

Carnival Industrial Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Ju Teng and Carnival Industrial

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

The idea behind Ju Teng International and Carnival Industrial 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.