Correlation Between Shineco and J J

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

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

Diversification Opportunities for Shineco and J J

0.08

Correlation Coefficient

Shineco  J J

Significant diversification

The 3 months correlation between Shineco and JJSF is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Shineco and J J Snack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J J Snack and Shineco 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 Shineco are associated (or correlated) with J J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J J Snack has no effect on the direction of Shineco i.e., Shineco and J J go up and down completely randomly.

Pair Corralation between Shineco and J J

Given the investment horizon of 90 days Shineco is expected to generate 36.55 times more return on investment than J J. However, Shineco is 36.55 times more volatile than J J Snack. It trades about 0.05 of its potential returns per unit of risk. J J Snack is currently generating about 0.01 per unit of risk. If you would invest  276.00  in Shineco on September 23, 2024 and sell it today you would lose (53.00) from holding Shineco or give up 19.2% of portfolio value over 90 days.

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

Shineco  vs.  J J Snack

Shineco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shineco has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

J J Snack

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days J J Snack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, J J is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Shineco and J J

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

The idea behind Shineco and J J Snack 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..