Correlation Between Juneyao Airlines and Andon Health

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

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

Diversification Opportunities for Juneyao Airlines and Andon Health

0.29

Correlation Coefficient

Juneyao Airlines  Andon Health

Modest diversification

The 3 months correlation between Juneyao and Andon is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Juneyao Airlines and Andon Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andon Health and Juneyao Airlines 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 Juneyao Airlines are associated (or correlated) with Andon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andon Health has no effect on the direction of Juneyao Airlines i.e., Juneyao Airlines and Andon Health go up and down completely randomly.

Pair Corralation between Juneyao Airlines and Andon Health

Assuming the 90 days trading horizon Juneyao Airlines is expected to under-perform the Andon Health. In addition to that, Juneyao Airlines is 2.37 times more volatile than Andon Health Co. It trades about -0.06 of its total potential returns per unit of risk. Andon Health Co is currently generating about -0.15 per unit of volatility. If you would invest  4,336  in Andon Health Co on September 28, 2024 and sell it today you would lose (140.00) from holding Andon Health Co or give up 3.23% of portfolio value over 90 days.

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

Juneyao Airlines  vs.  Andon Health Co

Juneyao Airlines

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Juneyao Airlines are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Juneyao Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Andon Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Andon Health Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Juneyao Airlines and Andon Health

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

The idea behind Juneyao Airlines and Andon Health 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.