Correlation Between JIAHUA STORES and MKS Instruments

Can any of the company-specific risk be diversified away by investing in both JIAHUA STORES and MKS Instruments 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 JIAHUA STORES and MKS Instruments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JIAHUA STORES and MKS Instruments, you can compare the effects of market volatilities on JIAHUA STORES and MKS Instruments 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 JIAHUA STORES with a short position of MKS Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of JIAHUA STORES and MKS Instruments.

Diversification Opportunities for JIAHUA STORES and MKS Instruments

0.0

Correlation Coefficient

JIAHUA STORES  MKS Instruments

Pay attention - limited upside

The 3 months correlation between JIAHUA and MKS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JIAHUA STORES and MKS Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKS Instruments and JIAHUA STORES 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 JIAHUA STORES are associated (or correlated) with MKS Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKS Instruments has no effect on the direction of JIAHUA STORES i.e., JIAHUA STORES and MKS Instruments go up and down completely randomly.

Pair Corralation between JIAHUA STORES and MKS Instruments

If you would invest  7,716  in MKS Instruments on September 13, 2024 and sell it today you would earn a total of  2,809  from holding MKS Instruments or generate 36.4% return on investment over 90 days.

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

JIAHUA STORES  vs.  MKS Instruments

JIAHUA STORES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JIAHUA STORES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JIAHUA STORES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

MKS Instruments

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MKS Instruments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MKS Instruments may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JIAHUA STORES and MKS Instruments

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

The idea behind JIAHUA STORES and MKS Instruments 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.