Correlation Between Bunge and China Jo
Can any of the company-specific risk be diversified away by investing in both Bunge and China Jo 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 Bunge and China Jo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bunge Limited and China Jo Jo Drugstores, you can compare the effects of market volatilities on Bunge and China Jo 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 Bunge with a short position of China Jo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bunge and China Jo.
Diversification Opportunities for Bunge and China Jo
Good diversification
The 3 months correlation between Bunge and China is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bunge Limited and China Jo-Jo Drugstores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Jo-Jo Drugstores and Bunge 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 Bunge Limited are associated (or correlated) with China Jo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Jo-Jo Drugstores has no effect on the direction of Bunge i.e., Bunge and China Jo go up and down completely randomly.
Pair Corralation between Bunge and China Jo
Allowing for the 90-day total investment horizon Bunge Limited is expected to generate 0.21 times more return on investment than China Jo. However, Bunge Limited is 4.79 times less risky than China Jo. It trades about 0.31 of its potential returns per unit of risk. China Jo Jo Drugstores is currently generating about -0.06 per unit of risk. If you would invest 9,374 in Bunge Limited on December 30, 2023 and sell it today you would earn a total of 878.00 from holding Bunge Limited or generate 9.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Bunge Limited vs. China Jo-Jo Drugstores
Performance |
Timeline |
Bunge Limited |
China Jo-Jo Drugstores |
Bunge and China Jo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bunge and China Jo
The main advantage of trading using opposite Bunge and China Jo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bunge position performs unexpectedly, China Jo 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 China Jo will offset losses from the drop in China Jo's long position.Bunge vs. Dole PLC | Bunge vs. Davis Commodities Limited | Bunge vs. Edible Garden AG | Bunge vs. Edible Garden AG |
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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 the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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