Correlation Between Jianzhi Education and MEDIFAST INC

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

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

Diversification Opportunities for Jianzhi Education and MEDIFAST INC

-0.33

Correlation Coefficient

Jianzhi Education  MEDIFAST INC

Very good diversification

The 3 months correlation between Jianzhi and MEDIFAST is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jianzhi Education Technology and MEDIFAST INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIFAST INC and Jianzhi Education 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 Jianzhi Education Technology are associated (or correlated) with MEDIFAST INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIFAST INC has no effect on the direction of Jianzhi Education i.e., Jianzhi Education and MEDIFAST INC go up and down completely randomly.

Pair Corralation between Jianzhi Education and MEDIFAST INC

Allowing for the 90-day total investment horizon Jianzhi Education Technology is expected to generate 1.84 times more return on investment than MEDIFAST INC. However, Jianzhi Education is 1.84 times more volatile than MEDIFAST INC. It trades about -0.01 of its potential returns per unit of risk. MEDIFAST INC is currently generating about -0.14 per unit of risk. If you would invest  215.00  in Jianzhi Education Technology on August 19, 2024 and sell it today you would lose (91.00) from holding Jianzhi Education Technology or give up 42.33% of portfolio value over 90 days.

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

Jianzhi Education Technology  vs.  MEDIFAST INC

Jianzhi Education

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jianzhi Education Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Jianzhi Education showed solid returns over the last few months and may actually be approaching a breakup point.

MEDIFAST INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDIFAST INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, MEDIFAST INC is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Jianzhi Education and MEDIFAST INC

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

The idea behind Jianzhi Education Technology and MEDIFAST INC 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.