Correlation Between Jiujiang Shanshui and V V

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

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

Diversification Opportunities for Jiujiang Shanshui and V V

0.94

Correlation Coefficient

Jiujiang Shanshui  V V

Almost no diversification

The 3 months correlation between Jiujiang and 600300 is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Jiujiang Shanshui Technology and V V Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V V Food and Jiujiang Shanshui 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 Jiujiang Shanshui Technology are associated (or correlated) with V V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V V Food has no effect on the direction of Jiujiang Shanshui i.e., Jiujiang Shanshui and V V go up and down completely randomly.

Pair Corralation between Jiujiang Shanshui and V V

Assuming the 90 days trading horizon Jiujiang Shanshui is expected to generate 1.24 times less return on investment than V V. In addition to that, Jiujiang Shanshui is 1.19 times more volatile than V V Food. It trades about 0.17 of its total potential returns per unit of risk. V V Food is currently generating about 0.26 per unit of volatility. If you would invest  232.00  in V V Food on September 12, 2024 and sell it today you would earn a total of  102.00  from holding V V Food or generate 43.97% return on investment over 90 days.

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

Jiujiang Shanshui Technology  vs.  V V Food

Jiujiang Shanshui

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jiujiang Shanshui Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiujiang Shanshui sustained solid returns over the last few months and may actually be approaching a breakup point.

V V Food

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in V V Food are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V V sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiujiang Shanshui and V V

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

The idea behind Jiujiang Shanshui Technology and V V Food 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..