Correlation Between Cass Information and JIAHUA STORES

Can any of the company-specific risk be diversified away by investing in both Cass Information 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 Cass Information and JIAHUA STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cass Information Systems and JIAHUA STORES, you can compare the effects of market volatilities on Cass Information 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 Cass Information with a short position of JIAHUA STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and JIAHUA STORES.

Diversification Opportunities for Cass Information and JIAHUA STORES

0.0

Correlation Coefficient

Cass Information  JIAHUA STORES

Pay attention - limited upside

The 3 months correlation between Cass and JIAHUA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and JIAHUA STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIAHUA STORES and Cass Information 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 Cass Information Systems 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 Cass Information i.e., Cass Information and JIAHUA STORES go up and down completely randomly.

Pair Corralation between Cass Information and JIAHUA STORES

If you would invest  1.90  in JIAHUA STORES on December 20, 2024 and sell it today you would earn a total of  0.00  from holding JIAHUA STORES or generate 0.0% return on investment over 90 days.

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

Cass Information Systems  vs.  JIAHUA STORES

Cass Information Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cass Information Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cass Information 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

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cass Information and JIAHUA STORES

The main advantage of trading using opposite Cass Information and JIAHUA STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information 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 Cass Information Systems 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.