Correlation Between JIAHUA STORES and AVIS BUDGET
Can any of the company-specific risk be diversified away by investing in both JIAHUA STORES and AVIS BUDGET 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 JIAHUA STORES and AVIS BUDGET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JIAHUA STORES and AVIS BUDGET GROUP, you can compare the effects of market volatilities on JIAHUA STORES and AVIS BUDGET 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 JIAHUA STORES with a short position of AVIS BUDGET. Check out your portfolio center. Please also check ongoing floating volatility patterns of JIAHUA STORES and AVIS BUDGET.
Diversification Opportunities for JIAHUA STORES and AVIS BUDGET
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JIAHUA and AVIS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JIAHUA STORES and AVIS BUDGET GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVIS BUDGET GROUP and JIAHUA STORES 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 JIAHUA STORES are associated (or correlated) with AVIS BUDGET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVIS BUDGET GROUP has no effect on the direction of JIAHUA STORES i.e., JIAHUA STORES and AVIS BUDGET go up and down completely randomly.
Pair Corralation between JIAHUA STORES and AVIS BUDGET
If you would invest 7,522 in AVIS BUDGET GROUP on November 3, 2024 and sell it today you would earn a total of 1,386 from holding AVIS BUDGET GROUP or generate 18.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JIAHUA STORES vs. AVIS BUDGET GROUP
Performance |
| Timeline |
| JIAHUA STORES |
| AVIS BUDGET GROUP |
JIAHUA STORES and AVIS BUDGET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JIAHUA STORES and AVIS BUDGET
The main advantage of trading using opposite JIAHUA STORES and AVIS BUDGET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JIAHUA STORES position performs unexpectedly, AVIS BUDGET 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 AVIS BUDGET will offset losses from the drop in AVIS BUDGET's long position.| JIAHUA STORES vs. INTERNET INJPADR 1 | JIAHUA STORES vs. Nippon Steel | JIAHUA STORES vs. Tianjin Capital Environmental | JIAHUA STORES vs. Highlight Communications AG |
| AVIS BUDGET vs. Genertec Universal Medical | AVIS BUDGET vs. Xinhua Winshare Publishing | AVIS BUDGET vs. ONWARD MEDICAL BV | AVIS BUDGET vs. DeVry Education 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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