Correlation Between JIAHUA STORES and Cal Maine

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

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

Diversification Opportunities for JIAHUA STORES and Cal Maine

0.0

Correlation Coefficient

JIAHUA STORES  Cal Maine

Pay attention - limited upside

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

Pair Corralation between JIAHUA STORES and Cal Maine

If you would invest  9,824  in Cal Maine Foods on October 22, 2024 and sell it today you would earn a total of  1,181  from holding Cal Maine Foods or generate 12.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

JIAHUA STORES  vs.  Cal Maine Foods

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.

Cal Maine Foods

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cal Maine Foods are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cal Maine unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JIAHUA STORES and Cal Maine

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

The idea behind JIAHUA STORES and Cal Maine Foods 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..