Correlation Between JIADE LIMITED and Lincoln Educational

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

By analyzing existing cross correlation between JIADE LIMITED Common and Lincoln Educational Services, you can compare the effects of market volatilities on JIADE LIMITED and Lincoln Educational 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 JIADE LIMITED with a short position of Lincoln Educational. Check out your portfolio center. Please also check ongoing floating volatility patterns of JIADE LIMITED and Lincoln Educational.

Diversification Opportunities for JIADE LIMITED and Lincoln Educational

-0.13

Correlation Coefficient

JIADE LIMITED  Lincoln Educational

Good diversification

The 3 months correlation between JIADE and Lincoln is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding JIADE LIMITED Common and Lincoln Educational Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Educational and JIADE LIMITED 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 JIADE LIMITED Common are associated (or correlated) with Lincoln Educational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Educational has no effect on the direction of JIADE LIMITED i.e., JIADE LIMITED and Lincoln Educational go up and down completely randomly.

Pair Corralation between JIADE LIMITED and Lincoln Educational

Given the investment horizon of 90 days JIADE LIMITED Common is expected to generate 2.96 times more return on investment than Lincoln Educational. However, JIADE LIMITED is 2.96 times more volatile than Lincoln Educational Services. It trades about 0.06 of its potential returns per unit of risk. Lincoln Educational Services is currently generating about 0.02 per unit of risk. If you would invest  53.00  in JIADE LIMITED Common on December 20, 2024 and sell it today you would earn a total of  7.00  from holding JIADE LIMITED Common or generate 13.21% return on investment over 90 days.

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

JIADE LIMITED Common  vs.  Lincoln Educational Services

JIADE LIMITED Common

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JIADE LIMITED Common are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, JIADE LIMITED reported solid returns over the last few months and may actually be approaching a breakup point.

Lincoln Educational

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lincoln Educational Services are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Lincoln Educational is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JIADE LIMITED and Lincoln Educational

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

The idea behind JIADE LIMITED Common and Lincoln Educational Services 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.