Correlation Between Jadeart and China Sun

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

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

Diversification Opportunities for Jadeart and China Sun

0.0

Correlation Coefficient

Jadeart  China Sun

Pay attention - limited upside

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

Pair Corralation between Jadeart and China Sun

If you would invest  0.34  in Jadeart Group on October 11, 2024 and sell it today you would lose (0.12) from holding Jadeart Group or give up 35.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

Jadeart Group  vs.  China Sun Grp

Jadeart Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jadeart Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Jadeart sustained solid returns over the last few months and may actually be approaching a breakup point.

China Sun Grp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Sun Grp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, China Sun is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Jadeart and China Sun

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

The idea behind Jadeart Group and China Sun Grp 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.