Correlation Between AVIC Fund and Jason Furniture

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

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

Diversification Opportunities for AVIC Fund and Jason Furniture

-0.64

Correlation Coefficient

AVIC Fund  Jason Furniture

Excellent diversification

The 3 months correlation between AVIC and Jason is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding AVIC Fund Management and Jason Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jason Furniture and AVIC Fund 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 AVIC Fund Management are associated (or correlated) with Jason Furniture. 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 has no effect on the direction of AVIC Fund i.e., AVIC Fund and Jason Furniture go up and down completely randomly.

Pair Corralation between AVIC Fund and Jason Furniture

Assuming the 90 days trading horizon AVIC Fund Management is expected to generate 0.3 times more return on investment than Jason Furniture. However, AVIC Fund Management is 3.37 times less risky than Jason Furniture. It trades about 0.07 of its potential returns per unit of risk. Jason Furniture is currently generating about -0.02 per unit of risk. If you would invest  884.00  in AVIC Fund Management on October 25, 2024 and sell it today you would earn a total of  196.00  from holding AVIC Fund Management or generate 22.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.1%
Values	Daily Returns

AVIC Fund Management  vs.  Jason Furniture

AVIC Fund Management

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AVIC Fund Management are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AVIC Fund may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Jason Furniture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jason Furniture 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AVIC Fund and Jason Furniture

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

The idea behind AVIC Fund Management 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.