Correlation Between ASSOC BR and JIAHUA STORES

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

Diversification Opportunities for ASSOC BR and JIAHUA STORES

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between ASSOC and JIAHUA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ASSOC BR FOODS and JIAHUA STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIAHUA STORES and ASSOC BR 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 ASSOC BR FOODS are associated (or correlated) with JIAHUA STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIAHUA STORES has no effect on the direction of ASSOC BR i.e., ASSOC BR and JIAHUA STORES go up and down completely randomly.

Pair Corralation between ASSOC BR and JIAHUA STORES

If you would invest  2,583  in ASSOC BR FOODS on September 14, 2024 and sell it today you would earn a total of  77.00  from holding ASSOC BR FOODS or generate 2.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ASSOC BR FOODS  vs.  JIAHUA STORES

 Performance 
       Timeline  
ASSOC BR FOODS 

Risk-Adjusted Performance

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Compared to the overall equity markets, risk-adjusted returns on investments in ASSOC BR FOODS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ASSOC BR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JIAHUA STORES 

Risk-Adjusted Performance

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

ASSOC BR and JIAHUA STORES Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ASSOC BR and JIAHUA STORES

The main advantage of trading using opposite ASSOC BR and JIAHUA STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSOC BR position performs unexpectedly, JIAHUA STORES 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 JIAHUA STORES will offset losses from the drop in JIAHUA STORES's long position.
The idea behind ASSOC BR FOODS and JIAHUA STORES 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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