Correlation Between Jiugui Liquor and Vontron Technology

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

By analyzing existing cross correlation between Jiugui Liquor Co and Vontron Technology Co, you can compare the effects of market volatilities on Jiugui Liquor and Vontron Technology 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 Jiugui Liquor with a short position of Vontron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiugui Liquor and Vontron Technology.

Diversification Opportunities for Jiugui Liquor and Vontron Technology

0.91

Correlation Coefficient

Jiugui Liquor  Vontron Technology

Almost no diversification

The 3 months correlation between Jiugui and Vontron is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Jiugui Liquor Co and Vontron Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vontron Technology and Jiugui Liquor 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 Jiugui Liquor Co are associated (or correlated) with Vontron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vontron Technology has no effect on the direction of Jiugui Liquor i.e., Jiugui Liquor and Vontron Technology go up and down completely randomly.

Pair Corralation between Jiugui Liquor and Vontron Technology

Assuming the 90 days trading horizon Jiugui Liquor Co is expected to generate 1.36 times more return on investment than Vontron Technology. However, Jiugui Liquor is 1.36 times more volatile than Vontron Technology Co. It trades about 0.14 of its potential returns per unit of risk. Vontron Technology Co is currently generating about 0.09 per unit of risk. If you would invest  4,272  in Jiugui Liquor Co on September 26, 2024 and sell it today you would earn a total of  1,367  from holding Jiugui Liquor Co or generate 32.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Jiugui Liquor Co  vs.  Vontron Technology Co

Jiugui Liquor

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jiugui Liquor Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiugui Liquor sustained solid returns over the last few months and may actually be approaching a breakup point.

Vontron Technology

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vontron Technology Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vontron Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiugui Liquor and Vontron Technology

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

The idea behind Jiugui Liquor Co and Vontron Technology Co 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.