Correlation Between Graphjet Technology and Jiangsu Expressway

Can any of the company-specific risk be diversified away by investing in both Graphjet Technology and Jiangsu Expressway 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 Graphjet Technology and Jiangsu Expressway into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Graphjet Technology and Jiangsu Expressway Co, you can compare the effects of market volatilities on Graphjet Technology and Jiangsu Expressway 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 Graphjet Technology with a short position of Jiangsu Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphjet Technology and Jiangsu Expressway.

Diversification Opportunities for Graphjet Technology and Jiangsu Expressway

-0.65

Correlation Coefficient

Graphjet Technology  Jiangsu Expressway

Excellent diversification

The 3 months correlation between Graphjet and Jiangsu is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Graphjet Technology and Jiangsu Expressway Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Expressway and Graphjet Technology 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 Graphjet Technology are associated (or correlated) with Jiangsu Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Expressway has no effect on the direction of Graphjet Technology i.e., Graphjet Technology and Jiangsu Expressway go up and down completely randomly.

Pair Corralation between Graphjet Technology and Jiangsu Expressway

Considering the 90-day investment horizon Graphjet Technology is expected to generate 12.73 times more return on investment than Jiangsu Expressway. However, Graphjet Technology is 12.73 times more volatile than Jiangsu Expressway Co. It trades about 0.03 of its potential returns per unit of risk. Jiangsu Expressway Co is currently generating about 0.03 per unit of risk. If you would invest  226.00  in Graphjet Technology on October 22, 2024 and sell it today you would lose (182.00) from holding Graphjet Technology or give up 80.53% of portfolio value over 90 days.

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

Graphjet Technology  vs.  Jiangsu Expressway Co

Graphjet Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Graphjet Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Graphjet Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Jiangsu Expressway

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jiangsu Expressway Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Jiangsu Expressway is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Graphjet Technology and Jiangsu Expressway

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

The idea behind Graphjet Technology and Jiangsu Expressway 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.