Correlation Between Abnova Taiwan and Jourdeness

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

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

Diversification Opportunities for Abnova Taiwan and Jourdeness

-0.19

Correlation Coefficient

Abnova Taiwan  Jourdeness

Good diversification

The 3 months correlation between Abnova and Jourdeness is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Abnova Taiwan Corp and Jourdeness Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jourdeness Group and Abnova Taiwan 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 Abnova Taiwan Corp are associated (or correlated) with Jourdeness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jourdeness Group has no effect on the direction of Abnova Taiwan i.e., Abnova Taiwan and Jourdeness go up and down completely randomly.

Pair Corralation between Abnova Taiwan and Jourdeness

Assuming the 90 days trading horizon Abnova Taiwan Corp is expected to generate 0.36 times more return on investment than Jourdeness. However, Abnova Taiwan Corp is 2.78 times less risky than Jourdeness. It trades about 0.24 of its potential returns per unit of risk. Jourdeness Group is currently generating about 0.01 per unit of risk. If you would invest  3,125  in Abnova Taiwan Corp on March 28, 2024 and sell it today you would earn a total of  280.00  from holding Abnova Taiwan Corp or generate 8.96% return on investment over 90 days.

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

Abnova Taiwan Corp  vs.  Jourdeness Group

Abnova Taiwan Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Abnova Taiwan Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Abnova Taiwan is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Jourdeness Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jourdeness Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Jourdeness 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 Abnova Taiwan and Jourdeness

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

The idea behind Abnova Taiwan Corp and Jourdeness Group 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.