Correlation Between DO Home and Jason Furniture(Hangzh

Can any of the company-specific risk be diversified away by investing in both DO Home and Jason Furniture(Hangzh 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 DO Home and Jason Furniture(Hangzh into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DO Home Collection and Jason Furniture, you can compare the effects of market volatilities on DO Home and Jason Furniture(Hangzh 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 DO Home with a short position of Jason Furniture(Hangzh. Check out your portfolio center. Please also check ongoing floating volatility patterns of DO Home and Jason Furniture(Hangzh.

Diversification Opportunities for DO Home and Jason Furniture(Hangzh

0.53

Correlation Coefficient

DO Home  Jason Furniture(Hangzh

Very weak diversification

The 3 months correlation between 002798 and Jason is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DO Home Collection and Jason Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jason Furniture(Hangzh and DO Home 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 DO Home Collection are associated (or correlated) with Jason Furniture(Hangzh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jason Furniture(Hangzh has no effect on the direction of DO Home i.e., DO Home and Jason Furniture(Hangzh go up and down completely randomly.

Pair Corralation between DO Home and Jason Furniture(Hangzh

Assuming the 90 days trading horizon DO Home Collection is expected to under-perform the Jason Furniture(Hangzh. In addition to that, DO Home is 1.73 times more volatile than Jason Furniture. It trades about -0.07 of its total potential returns per unit of risk. Jason Furniture is currently generating about -0.07 per unit of volatility. If you would invest  3,050  in Jason Furniture on December 11, 2024 and sell it today you would lose (282.00) from holding Jason Furniture or give up 9.25% of portfolio value over 90 days.

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

DO Home Collection  vs.  Jason Furniture

DO Home Collection

Risk-Adjusted Performance

Very Weak

Over the last 90 days DO Home Collection 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Jason Furniture(Hangzh

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jason Furniture has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with DO Home and Jason Furniture(Hangzh

The main advantage of trading using opposite DO Home and Jason Furniture(Hangzh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DO Home position performs unexpectedly, Jason Furniture(Hangzh 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 Jason Furniture(Hangzh will offset losses from the drop in Jason Furniture(Hangzh's long position.

The idea behind DO Home Collection and Jason Furniture 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.