Correlation Between JIAHUA STORES and Yellow Pages

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

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

Diversification Opportunities for JIAHUA STORES and Yellow Pages

0.0

Correlation Coefficient

JIAHUA STORES  Yellow Pages

Pay attention - limited upside

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

Pair Corralation between JIAHUA STORES and Yellow Pages

If you would invest  768.00  in Yellow Pages Limited on October 12, 2024 and sell it today you would lose (18.00) from holding Yellow Pages Limited or give up 2.34% of portfolio value over 90 days.

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

JIAHUA STORES  vs.  Yellow Pages Limited

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.

Yellow Pages Limited

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yellow Pages Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Yellow Pages reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JIAHUA STORES and Yellow Pages

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

The idea behind JIAHUA STORES and Yellow Pages Limited 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.