Correlation Between Li Ning and Jupiter Marine

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

By analyzing existing cross correlation between Li Ning Company and Jupiter Marine International, you can compare the effects of market volatilities on Li Ning and Jupiter Marine 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 Li Ning with a short position of Jupiter Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Ning and Jupiter Marine.

Diversification Opportunities for Li Ning and Jupiter Marine

0.0

Correlation Coefficient

Li Ning  Jupiter Marine

Pay attention - limited upside

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

Pair Corralation between Li Ning and Jupiter Marine

If you would invest  225.00  in Li Ning Company on September 19, 2024 and sell it today you would earn a total of  15.00  from holding Li Ning Company or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Li Ning Company  vs.  Jupiter Marine International

Li Ning Company

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Li Ning Company are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Li Ning reported solid returns over the last few months and may actually be approaching a breakup point.

Jupiter Marine Inter

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Li Ning and Jupiter Marine

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

The idea behind Li Ning Company and Jupiter Marine International 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.