Correlation Between Ju Teng and TaiMed Biologics

Can any of the company-specific risk be diversified away by investing in both Ju Teng and TaiMed Biologics 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 TaiMed Biologics 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 TaiMed Biologics, you can compare the effects of market volatilities on Ju Teng and TaiMed Biologics 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 TaiMed Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ju Teng and TaiMed Biologics.

Diversification Opportunities for Ju Teng and TaiMed Biologics

-0.56

Correlation Coefficient

Ju Teng  TaiMed Biologics

Excellent diversification

The 3 months correlation between 9136 and TaiMed is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ju Teng International and TaiMed Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TaiMed Biologics 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 TaiMed Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TaiMed Biologics has no effect on the direction of Ju Teng i.e., Ju Teng and TaiMed Biologics go up and down completely randomly.

Pair Corralation between Ju Teng and TaiMed Biologics

Assuming the 90 days trading horizon Ju Teng International is expected to generate 0.6 times more return on investment than TaiMed Biologics. However, Ju Teng International is 1.67 times less risky than TaiMed Biologics. It trades about -0.11 of its potential returns per unit of risk. TaiMed Biologics is currently generating about -0.09 per unit of risk. If you would invest  614.00  in Ju Teng International on September 24, 2024 and sell it today you would lose (14.00) from holding Ju Teng International or give up 2.28% of portfolio value over 90 days.

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

Ju Teng International  vs.  TaiMed Biologics

Ju Teng International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ju Teng International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

TaiMed Biologics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TaiMed Biologics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, TaiMed Biologics 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 TaiMed Biologics

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

The idea behind Ju Teng International and TaiMed Biologics 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.