Correlation Between QUEEN S and Jumbo SA
Can any of the company-specific risk be diversified away by investing in both QUEEN S and Jumbo SA 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 QUEEN S and Jumbo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QUEEN S ROAD and Jumbo SA, you can compare the effects of market volatilities on QUEEN S and Jumbo SA 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 QUEEN S with a short position of Jumbo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of QUEEN S and Jumbo SA.
Diversification Opportunities for QUEEN S and Jumbo SA
Significant diversification
The 3 months correlation between QUEEN and Jumbo is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD and Jumbo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jumbo SA and QUEEN S 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 QUEEN S ROAD are associated (or correlated) with Jumbo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jumbo SA has no effect on the direction of QUEEN S i.e., QUEEN S and Jumbo SA go up and down completely randomly.
Pair Corralation between QUEEN S and Jumbo SA
Assuming the 90 days horizon QUEEN S ROAD is expected to under-perform the Jumbo SA. In addition to that, QUEEN S is 1.96 times more volatile than Jumbo SA. It trades about -0.03 of its total potential returns per unit of risk. Jumbo SA is currently generating about 0.0 per unit of volatility. If you would invest 2,430 in Jumbo SA on August 29, 2024 and sell it today you would lose (8.00) from holding Jumbo SA or give up 0.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
QUEEN S ROAD vs. Jumbo SA
Performance |
| Timeline |
| QUEEN S ROAD |
| Jumbo SA |
QUEEN S and Jumbo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QUEEN S and Jumbo SA
The main advantage of trading using opposite QUEEN S and Jumbo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUEEN S position performs unexpectedly, Jumbo SA 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 Jumbo SA will offset losses from the drop in Jumbo SA's long position.The idea behind QUEEN S ROAD and Jumbo SA 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.| Jumbo SA vs. Gamma Communications plc | Jumbo SA vs. BE Semiconductor Industries | Jumbo SA vs. Entravision Communications | Jumbo SA vs. Magnachip Semiconductor |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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