Correlation Between China Jo and GNC Holdings

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Can any of the company-specific risk be diversified away by investing in both China Jo and GNC 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 China Jo and GNC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Jo Jo Drugstores and GNC Holdings, you can compare the effects of market volatilities on China Jo and GNC 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 China Jo with a short position of GNC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Jo and GNC Holdings.

Diversification Opportunities for China Jo and GNC Holdings

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between China Jo and GNC Holdings

If you would invest (100.00) in GNC Holdings on December 30, 2023 and sell it today you would earn a total of  100.00  from holding GNC Holdings or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

China Jo-Jo Drugstores  vs.  GNC Holdings

 Performance 
       Timeline  
China Jo-Jo Drugstores 

Risk-Adjusted Performance

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Over the last 90 days China Jo Jo Drugstores has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking indicators remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
GNC Holdings 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days GNC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, GNC Holdings is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

China Jo and GNC Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with China Jo and GNC Holdings

The main advantage of trading using opposite China Jo and GNC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Jo position performs unexpectedly, GNC 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 GNC Holdings will offset losses from the drop in GNC Holdings' long position.
The idea behind China Jo Jo Drugstores and GNC 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.
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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