Correlation Between JIAHUA STORES and REVO INSURANCE
Can any of the company-specific risk be diversified away by investing in both JIAHUA STORES and REVO INSURANCE 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 REVO INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JIAHUA STORES and REVO INSURANCE SPA, you can compare the effects of market volatilities on JIAHUA STORES and REVO INSURANCE 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 REVO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of JIAHUA STORES and REVO INSURANCE.
Diversification Opportunities for JIAHUA STORES and REVO INSURANCE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JIAHUA and REVO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JIAHUA STORES and REVO INSURANCE SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVO INSURANCE SPA 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 REVO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVO INSURANCE SPA has no effect on the direction of JIAHUA STORES i.e., JIAHUA STORES and REVO INSURANCE go up and down completely randomly.
Pair Corralation between JIAHUA STORES and REVO INSURANCE
If you would invest 1,115 in REVO INSURANCE SPA on October 13, 2024 and sell it today you would lose (10.00) from holding REVO INSURANCE SPA or give up 0.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JIAHUA STORES vs. REVO INSURANCE SPA
Performance |
| Timeline |
| JIAHUA STORES |
| REVO INSURANCE SPA |
JIAHUA STORES and REVO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JIAHUA STORES and REVO INSURANCE
The main advantage of trading using opposite JIAHUA STORES and REVO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JIAHUA STORES position performs unexpectedly, REVO INSURANCE 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 REVO INSURANCE will offset losses from the drop in REVO INSURANCE's long position.| JIAHUA STORES vs. Federal Agricultural Mortgage | JIAHUA STORES vs. Granite Construction | JIAHUA STORES vs. Sterling Construction | JIAHUA STORES vs. Molson Coors Beverage |
| REVO INSURANCE vs. JIAHUA STORES | REVO INSURANCE vs. Retail Estates NV | REVO INSURANCE vs. Burlington Stores | REVO INSURANCE vs. MCEWEN MINING INC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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