Correlation Between Jiangxi Copper and Boqii HoldingLtd

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Can any of the company-specific risk be diversified away by investing in both Jiangxi Copper and Boqii HoldingLtd 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 Jiangxi Copper and Boqii HoldingLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jiangxi Copper and Boqii HoldingLtd, you can compare the effects of market volatilities on Jiangxi Copper and Boqii HoldingLtd 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 Jiangxi Copper with a short position of Boqii HoldingLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Copper and Boqii HoldingLtd.

Diversification Opportunities for Jiangxi Copper and Boqii HoldingLtd

-0.46
  Correlation Coefficient

Very good diversification

The 3 months correlation between Jiangxi and Boqii is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Copper and Boqii HoldingLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boqii HoldingLtd and Jiangxi Copper 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 Jiangxi Copper are associated (or correlated) with Boqii HoldingLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boqii HoldingLtd has no effect on the direction of Jiangxi Copper i.e., Jiangxi Copper and Boqii HoldingLtd go up and down completely randomly.

Pair Corralation between Jiangxi Copper and Boqii HoldingLtd

Assuming the 90 days horizon Jiangxi Copper is expected to generate 22.62 times less return on investment than Boqii HoldingLtd. But when comparing it to its historical volatility, Jiangxi Copper is 34.09 times less risky than Boqii HoldingLtd. It trades about 0.15 of its potential returns per unit of risk. Boqii HoldingLtd is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  119.00  in Boqii HoldingLtd on September 5, 2022 and sell it today you would earn a total of  20.00  from holding Boqii HoldingLtd or generate 16.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Jiangxi Copper  vs.  Boqii HoldingLtd

 Performance (%) 
       Timeline  
Jiangxi Copper 
Jiangxi Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Jiangxi Copper are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Jiangxi Copper is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Jiangxi Price Channel

Boqii HoldingLtd 
Boqii Performance
0 of 100
Over the last 90 days Boqii HoldingLtd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Boqii HoldingLtd is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the insiders.

Boqii Price Channel

Jiangxi Copper and Boqii HoldingLtd Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jiangxi Copper and Boqii HoldingLtd

The main advantage of trading using opposite Jiangxi Copper and Boqii HoldingLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Copper position performs unexpectedly, Boqii HoldingLtd 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 Boqii HoldingLtd will offset losses from the drop in Boqii HoldingLtd's long position.
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The idea behind Jiangxi Copper and Boqii HoldingLtd 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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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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