Correlation Between Dareway Software and Jiajia Food

Can any of the company-specific risk be diversified away by investing in both Dareway Software and Jiajia Food 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 Dareway Software and Jiajia Food into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dareway Software Co and Jiajia Food Group, you can compare the effects of market volatilities on Dareway Software and Jiajia Food 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 Dareway Software with a short position of Jiajia Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dareway Software and Jiajia Food.

Diversification Opportunities for Dareway Software and Jiajia Food

0.58

Correlation Coefficient

Dareway Software  Jiajia Food

Very weak diversification

The 3 months correlation between Dareway and Jiajia is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dareway Software Co and Jiajia Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiajia Food Group and Dareway Software 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 Dareway Software Co are associated (or correlated) with Jiajia Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiajia Food Group has no effect on the direction of Dareway Software i.e., Dareway Software and Jiajia Food go up and down completely randomly.

Pair Corralation between Dareway Software and Jiajia Food

Assuming the 90 days trading horizon Dareway Software Co is expected to under-perform the Jiajia Food. In addition to that, Dareway Software is 1.06 times more volatile than Jiajia Food Group. It trades about -0.15 of its total potential returns per unit of risk. Jiajia Food Group is currently generating about 0.0 per unit of volatility. If you would invest  487.00  in Jiajia Food Group on October 1, 2024 and sell it today you would lose (5.00) from holding Jiajia Food Group or give up 1.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Dareway Software Co  vs.  Jiajia Food Group

Dareway Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dareway Software Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Jiajia Food Group

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Jiajia Food Group are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiajia Food sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dareway Software and Jiajia Food

The main advantage of trading using opposite Dareway Software and Jiajia Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dareway Software position performs unexpectedly, Jiajia Food 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 Jiajia Food will offset losses from the drop in Jiajia Food's long position.

The idea behind Dareway Software Co and Jiajia Food Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.