Correlation Between Trxade and China Jo

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

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

Diversification Opportunities for Trxade and China Jo

-0.64

Correlation Coefficient

Trxade  China Jo

Excellent diversification

The 3 months correlation between Trxade and China is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Trxade Group 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 Trxade 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 Trxade Group 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 Trxade i.e., Trxade and China Jo go up and down completely randomly.

Pair Corralation between Trxade and China Jo

Given the investment horizon of 90 days Trxade is expected to generate 60.47 times less return on investment than China Jo. But when comparing it to its historical volatility, Trxade Group is 1.68 times less risky than China Jo. It trades about 0.0 of its potential returns per unit of risk. China Jo Jo Drugstores is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  165.00  in China Jo Jo Drugstores on September 3, 2024 and sell it today you would earn a total of  40.00  from holding China Jo Jo Drugstores or generate 24.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	31.25%
Values	Daily Returns

Trxade Group  vs.  China Jo Jo Drugstores

Trxade Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trxade Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Trxade is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

China Jo Jo

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in China Jo Jo Drugstores are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward-looking indicators, China Jo exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trxade and China Jo

The main advantage of trading using opposite Trxade and China Jo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trxade 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 Trxade Group 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.