Correlation Between Ching Feng and Jetwell Computer

Can any of the company-specific risk be diversified away by investing in both Ching Feng and Jetwell Computer 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 Ching Feng and Jetwell Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ching Feng Home and Jetwell Computer Co, you can compare the effects of market volatilities on Ching Feng and Jetwell Computer 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 Ching Feng with a short position of Jetwell Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ching Feng and Jetwell Computer.

Diversification Opportunities for Ching Feng and Jetwell Computer

0.06

Correlation Coefficient

Ching Feng  Jetwell Computer

Significant diversification

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

Pair Corralation between Ching Feng and Jetwell Computer

Assuming the 90 days trading horizon Ching Feng is expected to generate 8.12 times less return on investment than Jetwell Computer. But when comparing it to its historical volatility, Ching Feng Home is 1.88 times less risky than Jetwell Computer. It trades about 0.05 of its potential returns per unit of risk. Jetwell Computer Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  13,750  in Jetwell Computer Co on December 4, 2024 and sell it today you would earn a total of  5,800  from holding Jetwell Computer Co or generate 42.18% return on investment over 90 days.

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

Ching Feng Home  vs.  Jetwell Computer Co

Ching Feng Home

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ching Feng Home are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Ching Feng is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Jetwell Computer

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jetwell Computer Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Jetwell Computer showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ching Feng and Jetwell Computer

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

The idea behind Ching Feng Home and Jetwell Computer 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.