Correlation Between Café Serendipity and China Jo
Can any of the company-specific risk be diversified away by investing in both Café Serendipity 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 Café Serendipity and China Jo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caf Serendipity Holdings and China Jo Jo Drugstores, you can compare the effects of market volatilities on Café Serendipity 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 Café Serendipity with a short position of China Jo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Café Serendipity and China Jo.
Diversification Opportunities for Café Serendipity and China Jo
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Café and China is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Caf Serendipity 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 Café Serendipity 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 Caf Serendipity 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 Café Serendipity i.e., Café Serendipity and China Jo go up and down completely randomly.
Pair Corralation between Café Serendipity and China Jo
Given the investment horizon of 90 days Caf Serendipity Holdings is expected to generate 9.45 times more return on investment than China Jo. However, Café Serendipity is 9.45 times more volatile than China Jo Jo Drugstores. It trades about 0.06 of its potential returns per unit of risk. China Jo Jo Drugstores is currently generating about -0.06 per unit of risk. If you would invest 4.00 in Caf Serendipity Holdings on September 2, 2024 and sell it today you would lose (3.98) from holding Caf Serendipity Holdings or give up 99.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caf Serendipity Holdings vs. China Jo Jo Drugstores
Performance |
| Timeline |
| Caf Serendipity Holdings |
| China Jo Jo |
Café Serendipity and China Jo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Café Serendipity and China Jo
The main advantage of trading using opposite Café Serendipity and China Jo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Café Serendipity 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.| Café Serendipity vs. China Jo Jo Drugstores | Café Serendipity vs. SunLink Health Systems | Café Serendipity vs. Leafly Holdings | Café Serendipity vs. PetMed Express |
| China Jo vs. SunLink Health Systems | China Jo vs. Leafly Holdings | China Jo vs. Allstar Health Brands | China Jo vs. Walgreens Boots Alliance |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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