Correlation Between AiXin Life and Calavo Growers

Can any of the company-specific risk be diversified away by investing in both AiXin Life and Calavo Growers 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 AiXin Life and Calavo Growers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AiXin Life International and Calavo Growers, you can compare the effects of market volatilities on AiXin Life and Calavo Growers 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 AiXin Life with a short position of Calavo Growers. Check out your portfolio center. Please also check ongoing floating volatility patterns of AiXin Life and Calavo Growers.

Diversification Opportunities for AiXin Life and Calavo Growers

-0.33

Correlation Coefficient

AiXin Life  Calavo Growers

Very good diversification

The 3 months correlation between AiXin and Calavo is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding AiXin Life International and Calavo Growers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calavo Growers and AiXin Life 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 AiXin Life International are associated (or correlated) with Calavo Growers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calavo Growers has no effect on the direction of AiXin Life i.e., AiXin Life and Calavo Growers go up and down completely randomly.

Pair Corralation between AiXin Life and Calavo Growers

Given the investment horizon of 90 days AiXin Life International is expected to generate 47.18 times more return on investment than Calavo Growers. However, AiXin Life is 47.18 times more volatile than Calavo Growers. It trades about 0.12 of its potential returns per unit of risk. Calavo Growers is currently generating about -0.01 per unit of risk. If you would invest  1.80  in AiXin Life International on December 28, 2024 and sell it today you would earn a total of  2.40  from holding AiXin Life International or generate 133.33% return on investment over 90 days.

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

AiXin Life International  vs.  Calavo Growers

AiXin Life International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AiXin Life International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, AiXin Life displayed solid returns over the last few months and may actually be approaching a breakup point.

Calavo Growers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Calavo Growers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Calavo Growers is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with AiXin Life and Calavo Growers

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

The idea behind AiXin Life International and Calavo Growers 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.