Correlation Between Chefs Warehouse and AiXin Life

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

By analyzing existing cross correlation between The Chefs Warehouse and AiXin Life International, you can compare the effects of market volatilities on Chefs Warehouse and AiXin Life 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 Chefs Warehouse with a short position of AiXin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chefs Warehouse and AiXin Life.

Diversification Opportunities for Chefs Warehouse and AiXin Life

-0.09

Correlation Coefficient

Chefs Warehouse  AiXin Life

Good diversification

The 3 months correlation between Chefs and AiXin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Chefs Warehouse and AiXin Life International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiXin Life International and Chefs Warehouse 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 The Chefs Warehouse are associated (or correlated) with AiXin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiXin Life International has no effect on the direction of Chefs Warehouse i.e., Chefs Warehouse and AiXin Life go up and down completely randomly.

Pair Corralation between Chefs Warehouse and AiXin Life

Given the investment horizon of 90 days The Chefs Warehouse is expected to generate 0.09 times more return on investment than AiXin Life. However, The Chefs Warehouse is 11.4 times less risky than AiXin Life. It trades about 0.3 of its potential returns per unit of risk. AiXin Life International is currently generating about -0.22 per unit of risk. If you would invest  3,999  in The Chefs Warehouse on September 5, 2024 and sell it today you would earn a total of  501.00  from holding The Chefs Warehouse or generate 12.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

The Chefs Warehouse  vs.  AiXin Life International

Chefs Warehouse

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Chefs Warehouse are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Chefs Warehouse may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AiXin Life International

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AiXin Life International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, AiXin Life displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chefs Warehouse and AiXin Life

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

The idea behind The Chefs Warehouse and AiXin Life International 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.