Correlation Between Jayud Global and Shengfeng Development

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

By analyzing existing cross correlation between Jayud Global Logistics and Shengfeng Development Limited, you can compare the effects of market volatilities on Jayud Global and Shengfeng Development 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 Jayud Global with a short position of Shengfeng Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jayud Global and Shengfeng Development.

Diversification Opportunities for Jayud Global and Shengfeng Development

-0.8

Correlation Coefficient

Jayud Global  Shengfeng Development

Pay attention - limited upside

The 3 months correlation between Jayud and Shengfeng is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jayud Global Logistics and Shengfeng Development Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengfeng Development and Jayud Global 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 Jayud Global Logistics are associated (or correlated) with Shengfeng Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengfeng Development has no effect on the direction of Jayud Global i.e., Jayud Global and Shengfeng Development go up and down completely randomly.

Pair Corralation between Jayud Global and Shengfeng Development

Considering the 90-day investment horizon Jayud Global Logistics is expected to generate 5.04 times more return on investment than Shengfeng Development. However, Jayud Global is 5.04 times more volatile than Shengfeng Development Limited. It trades about 0.24 of its potential returns per unit of risk. Shengfeng Development Limited is currently generating about -0.25 per unit of risk. If you would invest  88.00  in Jayud Global Logistics on September 27, 2024 and sell it today you would earn a total of  185.00  from holding Jayud Global Logistics or generate 210.23% return on investment over 90 days.

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

Jayud Global Logistics  vs.  Shengfeng Development Limited

Jayud Global Logistics

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jayud Global Logistics are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Jayud Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Shengfeng Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shengfeng Development Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Jayud Global and Shengfeng Development

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

The idea behind Jayud Global Logistics and Shengfeng Development Limited 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.