Correlation Between China Times and Jetwell Computer

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

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

Diversification Opportunities for China Times and Jetwell Computer

0.25

Correlation Coefficient

China Times  Jetwell Computer

Modest diversification

The 3 months correlation between China and Jetwell is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding China Times Publishing and Jetwell Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetwell Computer and China Times 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 China Times Publishing are associated (or correlated) with Jetwell Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetwell Computer has no effect on the direction of China Times i.e., China Times and Jetwell Computer go up and down completely randomly.

Pair Corralation between China Times and Jetwell Computer

Assuming the 90 days trading horizon China Times is expected to generate 4.6 times less return on investment than Jetwell Computer. In addition to that, China Times is 1.31 times more volatile than Jetwell Computer Co. It trades about 0.01 of its total potential returns per unit of risk. Jetwell Computer Co is currently generating about 0.08 per unit of volatility. If you would invest  9,230  in Jetwell Computer Co on September 13, 2024 and sell it today you would earn a total of  6,170  from holding Jetwell Computer Co or generate 66.85% return on investment over 90 days.

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

China Times Publishing  vs.  Jetwell Computer Co

China Times Publishing

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in China Times Publishing are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, China Times may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 fairly stable basic indicators, Jetwell Computer is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with China Times and Jetwell Computer

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

The idea behind China Times Publishing and Jetwell Computer 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.