Correlation Between Jiuzi Holdings and SunCar Technology

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

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

Diversification Opportunities for Jiuzi Holdings and SunCar Technology

0.03

Correlation Coefficient

Jiuzi Holdings  SunCar Technology

Significant diversification

The 3 months correlation between Jiuzi and SunCar is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jiuzi Holdings and SunCar Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunCar Technology 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 SunCar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunCar Technology has no effect on the direction of Jiuzi Holdings i.e., Jiuzi Holdings and SunCar Technology go up and down completely randomly.

Pair Corralation between Jiuzi Holdings and SunCar Technology

Given the investment horizon of 90 days Jiuzi Holdings is expected to generate 2.27 times more return on investment than SunCar Technology. However, Jiuzi Holdings is 2.27 times more volatile than SunCar Technology Group. It trades about 0.07 of its potential returns per unit of risk. SunCar Technology Group is currently generating about 0.0 per unit of risk. If you would invest  147.00  in Jiuzi Holdings on September 16, 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	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Jiuzi Holdings  vs.  SunCar Technology Group

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.

SunCar Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SunCar Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, SunCar Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jiuzi Holdings and SunCar Technology

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

The idea behind Jiuzi Holdings and SunCar Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.