Correlation Between Shandong Publishing and Jiangsu Bioperfectus

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

By analyzing existing cross correlation between Shandong Publishing Media and Jiangsu Bioperfectus Technologies, you can compare the effects of market volatilities on Shandong Publishing and Jiangsu Bioperfectus 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 Shandong Publishing with a short position of Jiangsu Bioperfectus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Publishing and Jiangsu Bioperfectus.

Diversification Opportunities for Shandong Publishing and Jiangsu Bioperfectus

0.13

Correlation Coefficient

Shandong Publishing  Jiangsu Bioperfectus

Average diversification

The 3 months correlation between Shandong and Jiangsu is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Publishing Media and Jiangsu Bioperfectus Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Bioperfectus and Shandong Publishing 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 Shandong Publishing Media are associated (or correlated) with Jiangsu Bioperfectus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Bioperfectus has no effect on the direction of Shandong Publishing i.e., Shandong Publishing and Jiangsu Bioperfectus go up and down completely randomly.

Pair Corralation between Shandong Publishing and Jiangsu Bioperfectus

Assuming the 90 days trading horizon Shandong Publishing Media is expected to under-perform the Jiangsu Bioperfectus. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Publishing Media is 1.31 times less risky than Jiangsu Bioperfectus. The stock trades about -0.1 of its potential returns per unit of risk. The Jiangsu Bioperfectus Technologies is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  7,751  in Jiangsu Bioperfectus Technologies on September 4, 2024 and sell it today you would lose (485.00) from holding Jiangsu Bioperfectus Technologies or give up 6.26% of portfolio value over 90 days.

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

Shandong Publishing Media  vs.  Jiangsu Bioperfectus Technolog

Shandong Publishing Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shandong Publishing Media 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 somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Jiangsu Bioperfectus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jiangsu Bioperfectus Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jiangsu Bioperfectus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shandong Publishing and Jiangsu Bioperfectus

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

The idea behind Shandong Publishing Media and Jiangsu Bioperfectus Technologies 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.