Correlation Between JIAHUA STORES and PLAYMATES TOYS

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

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

Diversification Opportunities for JIAHUA STORES and PLAYMATES TOYS

0.0

Correlation Coefficient

JIAHUA STORES  PLAYMATES TOYS

Pay attention - limited upside

The 3 months correlation between JIAHUA and PLAYMATES is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JIAHUA STORES and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS and JIAHUA STORES 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 JIAHUA STORES are associated (or correlated) with PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of JIAHUA STORES i.e., JIAHUA STORES and PLAYMATES TOYS go up and down completely randomly.

Pair Corralation between JIAHUA STORES and PLAYMATES TOYS

If you would invest  1.38  in PLAYMATES TOYS on October 5, 2024 and sell it today you would earn a total of  4.82  from holding PLAYMATES TOYS or generate 349.28% return on investment over 90 days.

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

JIAHUA STORES  vs.  PLAYMATES TOYS

JIAHUA STORES

Risk-Adjusted Performance

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

PLAYMATES TOYS

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days PLAYMATES TOYS 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 basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with JIAHUA STORES and PLAYMATES TOYS

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

The idea behind JIAHUA STORES and PLAYMATES TOYS 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.