Correlation Between Walt Disney and JIAHUA STORES

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Can any of the company-specific risk be diversified away by investing in both Walt Disney and JIAHUA STORES 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 Walt Disney and JIAHUA STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Walt Disney and JIAHUA STORES, you can compare the effects of market volatilities on Walt Disney and JIAHUA STORES 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 Walt Disney with a short position of JIAHUA STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walt Disney and JIAHUA STORES.

Diversification Opportunities for Walt Disney and JIAHUA STORES

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Walt Disney and JIAHUA STORES

If you would invest  1.90  in JIAHUA STORES on October 6, 2024 and sell it today you would earn a total of  0.00  from holding JIAHUA STORES or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

The Walt Disney  vs.  JIAHUA STORES

 Performance 
       Timeline  
Walt Disney 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in The Walt Disney are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Walt Disney unveiled solid returns over the last few months and may actually be approaching a breakup point.
JIAHUA STORES 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Walt Disney and JIAHUA STORES Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walt Disney and JIAHUA STORES

The main advantage of trading using opposite Walt Disney and JIAHUA STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walt Disney position performs unexpectedly, JIAHUA STORES 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 JIAHUA STORES will offset losses from the drop in JIAHUA STORES's long position.
The idea behind The Walt Disney and JIAHUA STORES 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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