Correlation Between Alliance Data and JIAHUA STORES
Can any of the company-specific risk be diversified away by investing in both Alliance Data and JIAHUA STORES 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 Alliance Data and JIAHUA STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Data Systems and JIAHUA STORES, you can compare the effects of market volatilities on Alliance Data and JIAHUA STORES 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 Alliance Data with a short position of JIAHUA STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Data and JIAHUA STORES.
Diversification Opportunities for Alliance Data and JIAHUA STORES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alliance and JIAHUA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Data Systems and JIAHUA STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIAHUA STORES and Alliance Data 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 Alliance Data Systems are associated (or correlated) with JIAHUA STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIAHUA STORES has no effect on the direction of Alliance Data i.e., Alliance Data and JIAHUA STORES go up and down completely randomly.
Pair Corralation between Alliance Data and JIAHUA STORES
If you would invest 1.90 in JIAHUA STORES on October 9, 2024 and sell it today you would earn a total of 0.00 from holding JIAHUA STORES or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliance Data Systems vs. JIAHUA STORES
Performance |
| Timeline |
| Alliance Data Systems |
| JIAHUA STORES |
Alliance Data and JIAHUA STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Data and JIAHUA STORES
The main advantage of trading using opposite Alliance Data and JIAHUA STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Data position performs unexpectedly, JIAHUA STORES 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 JIAHUA STORES will offset losses from the drop in JIAHUA STORES's long position.| Alliance Data vs. Apple Inc | Alliance Data vs. Apple Inc | Alliance Data vs. Apple Inc | Alliance Data vs. Apple Inc |
| JIAHUA STORES vs. Apple Inc | JIAHUA STORES vs. Apple Inc | JIAHUA STORES vs. Apple Inc | JIAHUA STORES vs. Apple 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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