Correlation Between AutoNation and Jiuzi Holdings

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

By analyzing existing cross correlation between AutoNation and Jiuzi Holdings, you can compare the effects of market volatilities on AutoNation and Jiuzi Holdings 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 AutoNation with a short position of Jiuzi Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoNation and Jiuzi Holdings.

Diversification Opportunities for AutoNation and Jiuzi Holdings

0.0

Correlation Coefficient

AutoNation  Jiuzi Holdings

Pay attention - limited upside

The 3 months correlation between AutoNation and Jiuzi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AutoNation and Jiuzi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiuzi Holdings and AutoNation 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 AutoNation are associated (or correlated) with Jiuzi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiuzi Holdings has no effect on the direction of AutoNation i.e., AutoNation and Jiuzi Holdings go up and down completely randomly.

Pair Corralation between AutoNation and Jiuzi Holdings

Allowing for the 90-day total investment horizon AutoNation is expected to generate 10.24 times less return on investment than Jiuzi Holdings. But when comparing it to its historical volatility, AutoNation is 5.46 times less risky than Jiuzi Holdings. It trades about 0.04 of its potential returns per unit of risk. Jiuzi Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  147.00  in Jiuzi Holdings on September 15, 2024 and sell it today you would earn a total of  31.00  from holding Jiuzi Holdings or generate 21.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AutoNation  vs.  Jiuzi Holdings

AutoNation

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AutoNation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, AutoNation is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Jiuzi Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jiuzi Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Jiuzi Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AutoNation and Jiuzi Holdings

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

The idea behind AutoNation and Jiuzi Holdings 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.