Correlation Between Fire Flower and China Jo

Can any of the company-specific risk be diversified away by investing in both Fire Flower and China Jo 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 Fire Flower and China Jo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fire Flower Holdings and China Jo Jo Drugstores, you can compare the effects of market volatilities on Fire Flower and China Jo 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 Fire Flower with a short position of China Jo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fire Flower and China Jo.

Diversification Opportunities for Fire Flower and China Jo

0.0

Correlation Coefficient

Fire Flower  China Jo

Pay attention - limited upside

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

Pair Corralation between Fire Flower and China Jo

If you would invest (100.00) in Fire Flower Holdings on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Fire Flower Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fire Flower Holdings  vs.  China Jo Jo Drugstores

Fire Flower Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fire Flower Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Fire Flower is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

China Jo Jo

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Jo Jo Drugstores 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 forward-looking indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Fire Flower and China Jo

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

The idea behind Fire Flower Holdings and China Jo Jo Drugstores 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.