Correlation Between Chong Hong and Jourdeness

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

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

Diversification Opportunities for Chong Hong and Jourdeness

-0.38

Correlation Coefficient

Chong Hong  Jourdeness

Very good diversification

The 3 months correlation between Chong and Jourdeness is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Chong Hong Construction and Jourdeness Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jourdeness Group and Chong Hong 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 Chong Hong Construction 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 Chong Hong i.e., Chong Hong and Jourdeness go up and down completely randomly.

Pair Corralation between Chong Hong and Jourdeness

Assuming the 90 days trading horizon Chong Hong Construction is expected to under-perform the Jourdeness. But the stock apears to be less risky and, when comparing its historical volatility, Chong Hong Construction is 1.49 times less risky than Jourdeness. The stock trades about -0.21 of its potential returns per unit of risk. The Jourdeness Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  4,740  in Jourdeness Group on March 31, 2024 and sell it today you would earn a total of  430.00  from holding Jourdeness Group or generate 9.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Chong Hong Construction  vs.  Jourdeness Group

Chong Hong Construction

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chong Hong Construction are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chong Hong showed solid returns over the last few months and may actually be approaching a breakup point.

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 Chong Hong and Jourdeness

The main advantage of trading using opposite Chong Hong and Jourdeness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chong Hong 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 Chong Hong Construction 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..