Correlation Between JIAHUA STORES and Air Canada

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

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

Diversification Opportunities for JIAHUA STORES and Air Canada

0.0

Correlation Coefficient

JIAHUA STORES  Air Canada

Pay attention - limited upside

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

Pair Corralation between JIAHUA STORES and Air Canada

If you would invest  1,452  in Air Canada on October 4, 2024 and sell it today you would earn a total of  50.00  from holding Air Canada or generate 3.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.7%
Values	Daily Returns

JIAHUA STORES  vs.  Air Canada

JIAHUA STORES

Risk-Adjusted Performance

0 of 100

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.

Air Canada

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Air Canada are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Air Canada unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JIAHUA STORES and Air Canada

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

The idea behind JIAHUA STORES and Air Canada 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.