Correlation Between Butterfly Network and JRSIS Health

Can any of the company-specific risk be diversified away by investing in both Butterfly Network and JRSIS Health 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 Butterfly Network and JRSIS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Butterfly Network and JRSIS Health Care, you can compare the effects of market volatilities on Butterfly Network and JRSIS Health 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 Butterfly Network with a short position of JRSIS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Butterfly Network and JRSIS Health.

Diversification Opportunities for Butterfly Network and JRSIS Health

-0.71

Correlation Coefficient

Butterfly Network  JRSIS Health

Pay attention - limited upside

The 3 months correlation between Butterfly and JRSIS is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Butterfly Network and JRSIS Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JRSIS Health Care and Butterfly Network 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 Butterfly Network are associated (or correlated) with JRSIS Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JRSIS Health Care has no effect on the direction of Butterfly Network i.e., Butterfly Network and JRSIS Health go up and down completely randomly.

Pair Corralation between Butterfly Network and JRSIS Health

Given the investment horizon of 90 days Butterfly Network is expected to generate 0.51 times more return on investment than JRSIS Health. However, Butterfly Network is 1.95 times less risky than JRSIS Health. It trades about 0.18 of its potential returns per unit of risk. JRSIS Health Care is currently generating about -0.01 per unit of risk. If you would invest  112.00  in Butterfly Network on September 21, 2024 and sell it today you would earn a total of  202.50  from holding Butterfly Network or generate 180.8% return on investment over 90 days.

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

Butterfly Network  vs.  JRSIS Health Care

Butterfly Network

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Butterfly Network are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Butterfly Network showed solid returns over the last few months and may actually be approaching a breakup point.

JRSIS Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JRSIS Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Butterfly Network and JRSIS Health

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

The idea behind Butterfly Network and JRSIS Health Care 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.