Correlation Between AutoNation and Jiuzi Holdings
Can any of the company-specific risk be diversified away by investing in both AutoNation and Jiuzi Holdings 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 AutoNation and Jiuzi Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoNation and Jiuzi Holdings, you can compare the effects of market volatilities on AutoNation and Jiuzi Holdings 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 AutoNation with a short position of Jiuzi Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoNation and Jiuzi Holdings.
Diversification Opportunities for AutoNation and Jiuzi Holdings
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AutoNation and Jiuzi is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding AutoNation and Jiuzi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiuzi Holdings and AutoNation 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 AutoNation are associated (or correlated) with Jiuzi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiuzi Holdings has no effect on the direction of AutoNation i.e., AutoNation and Jiuzi Holdings go up and down completely randomly.
Pair Corralation between AutoNation and Jiuzi Holdings
Allowing for the 90-day total investment horizon AutoNation is expected to generate 0.23 times more return on investment than Jiuzi Holdings. However, AutoNation is 4.36 times less risky than Jiuzi Holdings. It trades about 0.04 of its potential returns per unit of risk. Jiuzi Holdings is currently generating about -0.05 per unit of risk. If you would invest 14,523 in AutoNation on August 31, 2024 and sell it today you would earn a total of 3,366 from holding AutoNation or generate 23.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AutoNation vs. Jiuzi Holdings
Performance |
| Timeline |
| AutoNation |
| Jiuzi Holdings |
AutoNation and Jiuzi Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoNation and Jiuzi Holdings
The main advantage of trading using opposite AutoNation and Jiuzi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoNation position performs unexpectedly, Jiuzi Holdings 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 Jiuzi Holdings will offset losses from the drop in Jiuzi Holdings' long position.| AutoNation vs. Sonic Automotive | AutoNation vs. Lithia Motors | AutoNation vs. Asbury Automotive Group | AutoNation vs. Penske Automotive Group |
| Jiuzi Holdings vs. Lithia Motors | Jiuzi Holdings vs. AutoNation | Jiuzi Holdings vs. Asbury Automotive Group | Jiuzi Holdings vs. Penske Automotive Group |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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