Correlation Between Jean and Shuttle
Can any of the company-specific risk be diversified away by investing in both Jean and Shuttle 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 Jean and Shuttle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jean Co and Shuttle, you can compare the effects of market volatilities on Jean and Shuttle 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 Jean with a short position of Shuttle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jean and Shuttle.
Diversification Opportunities for Jean and Shuttle
Modest diversification
The 3 months correlation between Jean and Shuttle is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jean Co and Shuttle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuttle and Jean 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 Jean Co are associated (or correlated) with Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuttle has no effect on the direction of Jean i.e., Jean and Shuttle go up and down completely randomly.
Pair Corralation between Jean and Shuttle
Assuming the 90 days trading horizon Jean is expected to generate 1.43 times less return on investment than Shuttle. But when comparing it to its historical volatility, Jean Co is 1.06 times less risky than Shuttle. It trades about 0.03 of its potential returns per unit of risk. Shuttle is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,760 in Shuttle on September 4, 2024 and sell it today you would earn a total of 395.00 from holding Shuttle or generate 22.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jean Co vs. Shuttle
Performance |
| Timeline |
| Jean |
| Shuttle |
Jean and Shuttle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jean and Shuttle
The main advantage of trading using opposite Jean and Shuttle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jean position performs unexpectedly, Shuttle 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 Shuttle will offset losses from the drop in Shuttle's long position.| Jean vs. Shuttle | Jean vs. Amtran Technology Co | Jean vs. AVerMedia Technologies | Jean vs. Gigastorage Corp |
| Shuttle vs. Clevo Co | Shuttle vs. Gigastorage Corp | Shuttle vs. KYE Systems Corp | Shuttle vs. AVerMedia Technologies |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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