Correlation Between China Jo and 111

Can any of the company-specific risk be diversified away by investing in both China Jo and 111 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 111 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 111 Inc, you can compare the effects of market volatilities on China Jo and 111 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 111. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Jo and 111.

Diversification Opportunities for China Jo and 111

0.23

Correlation Coefficient

China Jo  111

Modest diversification

The 3 months correlation between China and 111 is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding China Jo Jo Drugstores and 111 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 111 Inc 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 111. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 111 Inc has no effect on the direction of China Jo i.e., China Jo and 111 go up and down completely randomly.

Pair Corralation between China Jo and 111

Given the investment horizon of 90 days China Jo is expected to generate 1.15 times less return on investment than 111. But when comparing it to its historical volatility, China Jo Jo Drugstores is 1.25 times less risky than 111. It trades about 0.08 of its potential returns per unit of risk. 111 Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  69.00  in 111 Inc on September 3, 2024 and sell it today you would earn a total of  14.00  from holding 111 Inc or generate 20.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

China Jo Jo Drugstores  vs.  111 Inc

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.

111 Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 111 Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, 111 demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Jo and 111

The main advantage of trading using opposite China Jo and 111 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Jo position performs unexpectedly, 111 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 111 will offset losses from the drop in 111's long position.

The idea behind China Jo Jo Drugstores and 111 Inc 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.