Correlation Between Changsha Jingjia and Broadcom

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

Diversification Opportunities for Changsha Jingjia and Broadcom

-0.74
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Changsha and Broadcom is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Changsha Jingjia Microelectron and Broadcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadcom and Changsha Jingjia 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 Changsha Jingjia Microelectronics are associated (or correlated) with Broadcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadcom has no effect on the direction of Changsha Jingjia i.e., Changsha Jingjia and Broadcom go up and down completely randomly.

Pair Corralation between Changsha Jingjia and Broadcom

Assuming the 90 days trading horizon Changsha Jingjia Microelectronics is expected to under-perform the Broadcom. In addition to that, Changsha Jingjia is 1.05 times more volatile than Broadcom. It trades about -0.08 of its total potential returns per unit of risk. Broadcom is currently generating about 0.09 per unit of volatility. If you would invest  30,856  in Broadcom on August 13, 2025 and sell it today you would earn a total of  4,340  from holding Broadcom or generate 14.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy92.19%
ValuesDaily Returns

Changsha Jingjia Microelectron  vs.  Broadcom

 Performance 
       Timeline  
Changsha Jingjia Mic 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Changsha Jingjia Microelectronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Broadcom 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Broadcom are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Broadcom displayed solid returns over the last few months and may actually be approaching a breakup point.

Changsha Jingjia and Broadcom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Changsha Jingjia and Broadcom

The main advantage of trading using opposite Changsha Jingjia and Broadcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changsha Jingjia position performs unexpectedly, Broadcom 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 Broadcom will offset losses from the drop in Broadcom's long position.
The idea behind Changsha Jingjia Microelectronics and Broadcom 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.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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