Correlation Between Jetwell Computer and Digital China

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

By analyzing existing cross correlation between Jetwell Computer Co and Digital China Holdings, you can compare the effects of market volatilities on Jetwell Computer and Digital China 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 Jetwell Computer with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jetwell Computer and Digital China.

Diversification Opportunities for Jetwell Computer and Digital China

0.11

Correlation Coefficient

Jetwell Computer  Digital China

Average diversification

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

Pair Corralation between Jetwell Computer and Digital China

Assuming the 90 days trading horizon Jetwell Computer Co is expected to under-perform the Digital China. But the stock apears to be less risky and, when comparing its historical volatility, Jetwell Computer Co is 1.14 times less risky than Digital China. The stock trades about -0.09 of its potential returns per unit of risk. The Digital China Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  667.00  in Digital China Holdings on September 4, 2024 and sell it today you would earn a total of  68.00  from holding Digital China Holdings or generate 10.19% return on investment over 90 days.

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

Jetwell Computer Co  vs.  Digital China Holdings

Jetwell Computer

Risk-Adjusted Performance

0 of 100

Very Weak

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

Digital China Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Digital China Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Digital China may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jetwell Computer and Digital China

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

The idea behind Jetwell Computer Co and Digital China 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.