Correlation Between Nasdaq and Sailun Jinyu

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Can any of the company-specific risk be diversified away by investing in both Nasdaq and Sailun Jinyu 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 Nasdaq and Sailun Jinyu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Sailun Jinyu Group, you can compare the effects of market volatilities on Nasdaq and Sailun Jinyu 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 Nasdaq with a short position of Sailun Jinyu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Sailun Jinyu.

Diversification Opportunities for Nasdaq and Sailun Jinyu

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between Nasdaq and Sailun is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Sailun Jinyu Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sailun Jinyu Group and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Sailun Jinyu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sailun Jinyu Group has no effect on the direction of Nasdaq i.e., Nasdaq and Sailun Jinyu go up and down completely randomly.

Pair Corralation between Nasdaq and Sailun Jinyu

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the Sailun Jinyu. But the stock apears to be less risky and, when comparing its historical volatility, Nasdaq Inc is 1.28 times less risky than Sailun Jinyu. The stock trades about -0.17 of its potential returns per unit of risk. The Sailun Jinyu Group is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  1,448  in Sailun Jinyu Group on September 22, 2024 and sell it today you would lose (40.00) from holding Sailun Jinyu Group or give up 2.76% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy91.3%
ValuesDaily Returns

Nasdaq Inc  vs.  Sailun Jinyu Group

 Performance 
       Timeline  
Nasdaq Inc 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Sailun Jinyu Group 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Sailun Jinyu Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sailun Jinyu is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nasdaq and Sailun Jinyu Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nasdaq and Sailun Jinyu

The main advantage of trading using opposite Nasdaq and Sailun Jinyu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Sailun Jinyu 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 Sailun Jinyu will offset losses from the drop in Sailun Jinyu's long position.
The idea behind Nasdaq Inc and Sailun Jinyu Group 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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