Correlation Between 111 and China Jo

Can any of the company-specific risk be diversified away by investing in both 111 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 111 and China Jo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 111 Inc and China Jo Jo Drugstores, you can compare the effects of market volatilities on 111 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 111 with a short position of China Jo. Check out your portfolio center. Please also check ongoing floating volatility patterns of 111 and China Jo.

Diversification Opportunities for 111 and China Jo

0.23

Correlation Coefficient

111  China Jo

Modest diversification

The 3 months correlation between 111 and China is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding 111 Inc 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 111 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 111 Inc 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 111 i.e., 111 and China Jo go up and down completely randomly.

Pair Corralation between 111 and China Jo

Allowing for the 90-day total investment horizon 111 Inc is expected to generate 1.25 times more return on investment than China Jo. However, 111 is 1.25 times more volatile than China Jo Jo Drugstores. It trades about 0.07 of its potential returns per unit of risk. China Jo Jo Drugstores is currently generating about 0.08 per unit of risk. If you would invest  69.00  in 111 Inc on September 3, 2024 and sell it today you would earn a total of  14.00  from holding 111 Inc or generate 20.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

111 Inc  vs.  China Jo Jo Drugstores

111 Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 111 Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, 111 demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 111 and China Jo

The main advantage of trading using opposite 111 and China Jo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 111 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 111 Inc 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.