Correlation Between Nasdaq and Jinli Group

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

By analyzing existing cross correlation between Nasdaq Inc and Jinli Group Holdings, you can compare the effects of market volatilities on Nasdaq and Jinli Group 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 Jinli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Jinli Group.

Diversification Opportunities for Nasdaq and Jinli Group

-0.11

Correlation Coefficient

Nasdaq  Jinli Group

Good diversification

The 3 months correlation between Nasdaq and Jinli is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Jinli Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinli Group Holdings 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 Jinli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinli Group Holdings has no effect on the direction of Nasdaq i.e., Nasdaq and Jinli Group go up and down completely randomly.

Pair Corralation between Nasdaq and Jinli Group

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.71 times more return on investment than Jinli Group. However, Nasdaq Inc is 1.41 times less risky than Jinli Group. It trades about 0.01 of its potential returns per unit of risk. Jinli Group Holdings is currently generating about -0.14 per unit of risk. If you would invest  7,714  in Nasdaq Inc on December 28, 2024 and sell it today you would earn a total of  39.00  from holding Nasdaq Inc or generate 0.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

Nasdaq Inc  vs.  Jinli Group Holdings

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 1 (%) 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.

Jinli Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jinli Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Nasdaq and Jinli Group

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

The idea behind Nasdaq Inc and Jinli Group Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.