Correlation Between Jianzhi Education and Dollar Tree

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

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

Diversification Opportunities for Jianzhi Education and Dollar Tree

-0.69

Correlation Coefficient

Jianzhi Education  Dollar Tree

Excellent diversification

The 3 months correlation between Jianzhi and Dollar is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jianzhi Education Technology and Dollar Tree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar Tree and Jianzhi Education 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 Jianzhi Education Technology are associated (or correlated) with Dollar Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar Tree has no effect on the direction of Jianzhi Education i.e., Jianzhi Education and Dollar Tree go up and down completely randomly.

Pair Corralation between Jianzhi Education and Dollar Tree

Allowing for the 90-day total investment horizon Jianzhi Education Technology is expected to under-perform the Dollar Tree. In addition to that, Jianzhi Education is 2.49 times more volatile than Dollar Tree. It trades about -0.07 of its total potential returns per unit of risk. Dollar Tree is currently generating about 0.1 per unit of volatility. If you would invest  6,318  in Dollar Tree on February 18, 2025 and sell it today you would earn a total of  2,333  from holding Dollar Tree or generate 36.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Jianzhi Education Technology  vs.  Dollar Tree

Jianzhi Education

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jianzhi Education Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Dollar Tree

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dollar Tree are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Dollar Tree reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jianzhi Education and Dollar Tree

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

The idea behind Jianzhi Education Technology and Dollar Tree 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..