Correlation Between China Liberal and Jackpot Digital

Can any of the company-specific risk be diversified away by investing in both China Liberal and Jackpot Digital 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 China Liberal and Jackpot Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Liberal Education and Jackpot Digital, you can compare the effects of market volatilities on China Liberal and Jackpot Digital 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 China Liberal with a short position of Jackpot Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Liberal and Jackpot Digital.

Diversification Opportunities for China Liberal and Jackpot Digital

0.55

Correlation Coefficient

China Liberal  Jackpot Digital

Very weak diversification

The 3 months correlation between China and Jackpot is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding China Liberal Education and Jackpot Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackpot Digital and China Liberal 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 China Liberal Education are associated (or correlated) with Jackpot Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackpot Digital has no effect on the direction of China Liberal i.e., China Liberal and Jackpot Digital go up and down completely randomly.

Pair Corralation between China Liberal and Jackpot Digital

Given the investment horizon of 90 days China Liberal Education is expected to under-perform the Jackpot Digital. But the stock apears to be less risky and, when comparing its historical volatility, China Liberal Education is 1.51 times less risky than Jackpot Digital. The stock trades about -0.1 of its potential returns per unit of risk. The Jackpot Digital is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  4.25  in Jackpot Digital on September 25, 2024 and sell it today you would earn a total of  0.30  from holding Jackpot Digital or generate 7.06% return on investment over 90 days.

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

China Liberal Education  vs.  Jackpot Digital

China Liberal Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Liberal Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Jackpot Digital

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jackpot Digital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jackpot Digital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with China Liberal and Jackpot Digital

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

The idea behind China Liberal Education and Jackpot Digital 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 CEOs Directory module to screen CEOs from public companies around the world.