Correlation Between Vats Liquor and Haoxiangni Jujube

Can any of the company-specific risk be diversified away by investing in both Vats Liquor and Haoxiangni Jujube 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 Vats Liquor and Haoxiangni Jujube into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vats Liquor Chain and Haoxiangni Jujube Co, you can compare the effects of market volatilities on Vats Liquor and Haoxiangni Jujube 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 Vats Liquor with a short position of Haoxiangni Jujube. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vats Liquor and Haoxiangni Jujube.

Diversification Opportunities for Vats Liquor and Haoxiangni Jujube

0.34

Correlation Coefficient

Vats Liquor  Haoxiangni Jujube

Weak diversification

The 3 months correlation between Vats and Haoxiangni is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vats Liquor Chain and Haoxiangni Jujube Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haoxiangni Jujube and Vats Liquor 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 Vats Liquor Chain are associated (or correlated) with Haoxiangni Jujube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haoxiangni Jujube has no effect on the direction of Vats Liquor i.e., Vats Liquor and Haoxiangni Jujube go up and down completely randomly.

Pair Corralation between Vats Liquor and Haoxiangni Jujube

Assuming the 90 days trading horizon Vats Liquor Chain is expected to under-perform the Haoxiangni Jujube. But the stock apears to be less risky and, when comparing its historical volatility, Vats Liquor Chain is 1.54 times less risky than Haoxiangni Jujube. The stock trades about -0.1 of its potential returns per unit of risk. The Haoxiangni Jujube Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  785.00  in Haoxiangni Jujube Co on October 10, 2024 and sell it today you would lose (42.00) from holding Haoxiangni Jujube Co or give up 5.35% of portfolio value over 90 days.

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

Vats Liquor Chain  vs.  Haoxiangni Jujube Co

Vats Liquor Chain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vats Liquor Chain has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Vats Liquor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Haoxiangni Jujube

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Haoxiangni Jujube Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Haoxiangni Jujube sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vats Liquor and Haoxiangni Jujube

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

The idea behind Vats Liquor Chain and Haoxiangni Jujube Co 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.