Correlation Between Global Partners and China Jo
Can any of the company-specific risk be diversified away by investing in both Global Partners 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 Global Partners and China Jo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Partners LP and China Jo Jo Drugstores, you can compare the effects of market volatilities on Global Partners 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 Global Partners with a short position of China Jo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Partners and China Jo.
Diversification Opportunities for Global Partners and China Jo
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and China is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Global Partners LP 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 Global Partners 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 Global Partners LP 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 Global Partners i.e., Global Partners and China Jo go up and down completely randomly.
Pair Corralation between Global Partners and China Jo
Assuming the 90 days trading horizon Global Partners LP is expected to generate 0.06 times more return on investment than China Jo. However, Global Partners LP is 16.27 times less risky than China Jo. It trades about 0.15 of its potential returns per unit of risk. China Jo Jo Drugstores is currently generating about -0.13 per unit of risk. If you would invest 2,588 in Global Partners LP on August 31, 2024 and sell it today you would earn a total of 22.00 from holding Global Partners LP or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Partners LP vs. China Jo Jo Drugstores
Performance |
| Timeline |
| Global Partners LP |
| China Jo Jo |
Global Partners and China Jo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Partners and China Jo
The main advantage of trading using opposite Global Partners and China Jo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Partners 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.| Global Partners vs. GasLog Partners LP | Global Partners vs. GasLog Partners LP | Global Partners vs. Aquagold International | Global Partners vs. Thrivent High Yield |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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