Correlation Between JIN MEDICAL and BioLife Sciences

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

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

Diversification Opportunities for JIN MEDICAL and BioLife Sciences

0.0

Correlation Coefficient

JIN MEDICAL  BioLife Sciences

Pay attention - limited upside

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

Pair Corralation between JIN MEDICAL and BioLife Sciences

Given the investment horizon of 90 days JIN MEDICAL is expected to generate 5.5 times less return on investment than BioLife Sciences. But when comparing it to its historical volatility, JIN MEDICAL INTERNATIONAL is 3.27 times less risky than BioLife Sciences. It trades about 0.06 of its potential returns per unit of risk. BioLife Sciences is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.01  in BioLife Sciences on September 15, 2024 and sell it today you would earn a total of  0.00  from holding BioLife Sciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JIN MEDICAL INTERNATIONAL  vs.  BioLife Sciences

JIN MEDICAL INTERNATIONAL

Risk-Adjusted Performance

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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 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.

BioLife Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioLife Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, BioLife Sciences is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JIN MEDICAL and BioLife Sciences

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

The idea behind JIN MEDICAL INTERNATIONAL and BioLife Sciences 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.