Correlation Between Jack In and Yum China
Can any of the company-specific risk be diversified away by investing in both Jack In and Yum China 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 Jack In and Yum China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jack In The and Yum China Holdings, you can compare the effects of market volatilities on Jack In and Yum China 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 Jack In with a short position of Yum China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack In and Yum China.
Diversification Opportunities for Jack In and Yum China
Significant diversification
The 3 months correlation between Jack and Yum is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jack In The and Yum China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum China Holdings and Jack In 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 Jack In The are associated (or correlated) with Yum China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yum China Holdings has no effect on the direction of Jack In i.e., Jack In and Yum China go up and down completely randomly.
Pair Corralation between Jack In and Yum China
Given the investment horizon of 90 days Jack In is expected to generate 3.04 times less return on investment than Yum China. In addition to that, Jack In is 1.33 times more volatile than Yum China Holdings. It trades about 0.04 of its total potential returns per unit of risk. Yum China Holdings is currently generating about 0.14 per unit of volatility. If you would invest 4,389 in Yum China Holdings on August 24, 2024 and sell it today you would earn a total of 312.50 from holding Yum China Holdings or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jack In The vs. Yum China Holdings
Performance |
| Timeline |
| Jack In |
| Yum China Holdings |
Jack In and Yum China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jack In and Yum China
The main advantage of trading using opposite Jack In and Yum China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack In position performs unexpectedly, Yum China 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 Yum China will offset losses from the drop in Yum China's long position.| Jack In vs. Dine Brands Global | Jack In vs. Bloomin Brands | Jack In vs. BJs Restaurants | Jack In vs. The Cheesecake Factory |
| Yum China vs. Chipotle Mexican Grill | Yum China vs. Eshallgo Class A | Yum China vs. Amtech Systems | Yum China vs. Gold Fields Ltd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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