Correlation Between China Jo and Original Bark

Can any of the company-specific risk be diversified away by investing in both China Jo and Original Bark 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 China Jo and Original Bark into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Jo Jo Drugstores and Original Bark Co, you can compare the effects of market volatilities on China Jo and Original Bark 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 China Jo with a short position of Original Bark. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Jo and Original Bark.

Diversification Opportunities for China Jo and Original Bark

0.71

Correlation Coefficient

China Jo  Original Bark

Poor diversification

The 3 months correlation between China and Original is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Jo Jo Drugstores and Original Bark Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Original Bark and China Jo 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 China Jo Jo Drugstores are associated (or correlated) with Original Bark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Original Bark has no effect on the direction of China Jo i.e., China Jo and Original Bark go up and down completely randomly.

Pair Corralation between China Jo and Original Bark

Given the investment horizon of 90 days China Jo Jo Drugstores is expected to generate 1.61 times more return on investment than Original Bark. However, China Jo is 1.61 times more volatile than Original Bark Co. It trades about -0.07 of its potential returns per unit of risk. Original Bark Co is currently generating about -0.13 per unit of risk. If you would invest  190.00  in China Jo Jo Drugstores on December 26, 2024 and sell it today you would lose (46.00) from holding China Jo Jo Drugstores or give up 24.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	76.67%
Values	Daily Returns

China Jo Jo Drugstores  vs.  Original Bark Co

China Jo Jo

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Jo Jo Drugstores has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Original Bark

Risk-Adjusted Performance

Very Weak

Over the last 90 days Original Bark Co 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 quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with China Jo and Original Bark

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

The idea behind China Jo Jo Drugstores and Original Bark 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..