Correlation Between Ingles Markets and China Jo
Can any of the company-specific risk be diversified away by investing in both Ingles Markets 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 Ingles Markets and China Jo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingles Markets Incorporated and China Jo Jo Drugstores, you can compare the effects of market volatilities on Ingles Markets 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 Ingles Markets with a short position of China Jo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingles Markets and China Jo.
Diversification Opportunities for Ingles Markets and China Jo
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ingles and China is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ingles Markets Incorporated 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 Ingles Markets 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 Ingles Markets Incorporated 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 Ingles Markets i.e., Ingles Markets and China Jo go up and down completely randomly.
Pair Corralation between Ingles Markets and China Jo
Assuming the 90 days horizon Ingles Markets is expected to generate 1.09 times less return on investment than China Jo. But when comparing it to its historical volatility, Ingles Markets Incorporated is 3.0 times less risky than China Jo. It trades about 0.24 of its potential returns per unit of risk. China Jo Jo Drugstores is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 182.00 in China Jo Jo Drugstores on August 24, 2024 and sell it today you would earn a total of 16.00 from holding China Jo Jo Drugstores or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingles Markets Incorporated vs. China Jo Jo Drugstores
Performance |
| Timeline |
| Ingles Markets |
| China Jo Jo |
Ingles Markets and China Jo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingles Markets and China Jo
The main advantage of trading using opposite Ingles Markets and China Jo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingles Markets 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.| Ingles Markets vs. Weis Markets | Ingles Markets vs. Natural Grocers by | Ingles Markets vs. Sendas Distribuidora SA | Ingles Markets vs. Grocery Outlet Holding |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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