Correlation Between ReShape Lifesciences and JIN MEDICAL

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

By analyzing existing cross correlation between ReShape Lifesciences and JIN MEDICAL INTERNATIONAL, you can compare the effects of market volatilities on ReShape Lifesciences and JIN MEDICAL 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 ReShape Lifesciences with a short position of JIN MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReShape Lifesciences and JIN MEDICAL.

Diversification Opportunities for ReShape Lifesciences and JIN MEDICAL

0.57

Correlation Coefficient

ReShape Lifesciences  JIN MEDICAL

Very weak diversification

The 3 months correlation between ReShape and JIN is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ReShape Lifesciences and JIN MEDICAL INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIN MEDICAL INTERNATIONAL and ReShape Lifesciences 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 ReShape Lifesciences are associated (or correlated) with JIN MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIN MEDICAL INTERNATIONAL has no effect on the direction of ReShape Lifesciences i.e., ReShape Lifesciences and JIN MEDICAL go up and down completely randomly.

Pair Corralation between ReShape Lifesciences and JIN MEDICAL

Given the investment horizon of 90 days ReShape Lifesciences is expected to under-perform the JIN MEDICAL. In addition to that, ReShape Lifesciences is 1.2 times more volatile than JIN MEDICAL INTERNATIONAL. It trades about -0.32 of its total potential returns per unit of risk. JIN MEDICAL INTERNATIONAL is currently generating about 0.0 per unit of volatility. If you would invest  88.00  in JIN MEDICAL INTERNATIONAL on December 28, 2024 and sell it today you would lose (17.00) from holding JIN MEDICAL INTERNATIONAL or give up 19.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

ReShape Lifesciences  vs.  JIN MEDICAL INTERNATIONAL

ReShape Lifesciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days ReShape Lifesciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

JIN MEDICAL INTERNATIONAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days JIN MEDICAL INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, JIN MEDICAL is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with ReShape Lifesciences and JIN MEDICAL

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

The idea behind ReShape Lifesciences and JIN MEDICAL 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.