Correlation Between Jiuzi Holdings and AutoNation

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

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

Diversification Opportunities for Jiuzi Holdings and AutoNation

0.0

Correlation Coefficient

Jiuzi Holdings  AutoNation

Pay attention - limited upside

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

Pair Corralation between Jiuzi Holdings and AutoNation

Given the investment horizon of 90 days Jiuzi Holdings is expected to under-perform the AutoNation. In addition to that, Jiuzi Holdings is 4.85 times more volatile than AutoNation. It trades about -0.03 of its total potential returns per unit of risk. AutoNation is currently generating about 0.02 per unit of volatility. If you would invest  16,850  in AutoNation on September 15, 2024 and sell it today you would earn a total of  420.00  from holding AutoNation or generate 2.49% return on investment over 90 days.

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

Jiuzi Holdings  vs.  AutoNation

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.

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.

Pair Trading with Jiuzi Holdings and AutoNation

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

The idea behind Jiuzi Holdings and AutoNation 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.