Correlation Between Carvana and Jiuzi Holdings

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

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

Diversification Opportunities for Carvana and Jiuzi Holdings

-0.31

Correlation Coefficient

Carvana  Jiuzi Holdings

Very good diversification

The 3 months correlation between Carvana and Jiuzi is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Carvana Co and Jiuzi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiuzi Holdings and Carvana 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 Carvana Co 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 Carvana i.e., Carvana and Jiuzi Holdings go up and down completely randomly.

Pair Corralation between Carvana and Jiuzi Holdings

Given the investment horizon of 90 days Carvana Co is expected to generate 0.33 times more return on investment than Jiuzi Holdings. However, Carvana Co is 3.02 times less risky than Jiuzi Holdings. It trades about 0.24 of its potential returns per unit of risk. Jiuzi Holdings is currently generating about 0.07 per unit of risk. If you would invest  15,658  in Carvana Co on September 17, 2024 and sell it today you would earn a total of  9,167  from holding Carvana Co or generate 58.55% return on investment over 90 days.

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

Carvana Co  vs.  Jiuzi Holdings

Carvana

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carvana Co are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Carvana sustained solid returns over the last few months and may actually be approaching a breakup point.

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 weak basic indicators, Jiuzi Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carvana and Jiuzi Holdings

The main advantage of trading using opposite Carvana and Jiuzi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carvana 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 Carvana Co 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.