Correlation Between China Jo and Trxade

Can any of the company-specific risk be diversified away by investing in both China Jo and Trxade 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 Trxade 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 Trxade Group, you can compare the effects of market volatilities on China Jo and Trxade 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 Trxade. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Jo and Trxade.

Diversification Opportunities for China Jo and Trxade

-0.64

Correlation Coefficient

China Jo  Trxade

Excellent diversification

The 3 months correlation between China and Trxade is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding China Jo Jo Drugstores and Trxade Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trxade Group 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 Trxade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trxade Group has no effect on the direction of China Jo i.e., China Jo and Trxade go up and down completely randomly.

Pair Corralation between China Jo and Trxade

Given the investment horizon of 90 days China Jo is expected to generate 228.28 times less return on investment than Trxade. But when comparing it to its historical volatility, China Jo Jo Drugstores is 1.79 times less risky than Trxade. It trades about 0.0 of its potential returns per unit of risk. Trxade Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  648.00  in Trxade Group on September 3, 2024 and sell it today you would earn a total of  98.00  from holding Trxade Group or generate 15.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	64.8%
Values	Daily Returns

China Jo Jo Drugstores  vs.  Trxade Group

China Jo Jo

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in China Jo Jo Drugstores are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward-looking indicators, China Jo exhibited solid returns over the last few months and may actually be approaching a breakup point.

Trxade Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trxade Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Trxade is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with China Jo and Trxade

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

The idea behind China Jo Jo Drugstores and Trxade Group 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.