Correlation Between Castles Technology and Jean
Can any of the company-specific risk be diversified away by investing in both Castles Technology and Jean 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 Castles Technology and Jean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castles Technology Co and Jean Co, you can compare the effects of market volatilities on Castles Technology and Jean 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 Castles Technology with a short position of Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castles Technology and Jean.
Diversification Opportunities for Castles Technology and Jean
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Castles and Jean is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Castles Technology Co and Jean Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jean and Castles Technology 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 Castles Technology Co are associated (or correlated) with Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jean has no effect on the direction of Castles Technology i.e., Castles Technology and Jean go up and down completely randomly.
Pair Corralation between Castles Technology and Jean
Assuming the 90 days trading horizon Castles Technology is expected to generate 1.84 times less return on investment than Jean. In addition to that, Castles Technology is 1.14 times more volatile than Jean Co. It trades about 0.03 of its total potential returns per unit of risk. Jean Co is currently generating about 0.07 per unit of volatility. If you would invest 1,305 in Jean Co on October 14, 2024 and sell it today you would earn a total of 1,195 from holding Jean Co or generate 91.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Castles Technology Co vs. Jean Co
Performance |
| Timeline |
| Castles Technology |
| Jean |
Castles Technology and Jean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castles Technology and Jean
The main advantage of trading using opposite Castles Technology and Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castles Technology position performs unexpectedly, Jean 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 Jean will offset losses from the drop in Jean's long position.| Castles Technology vs. AVerMedia Technologies | Castles Technology vs. Min Aik Technology | Castles Technology vs. Jean Co | Castles Technology vs. Uniform Industrial Corp |
| Jean vs. Shuttle | Jean vs. Amtran Technology Co | Jean vs. AVerMedia Technologies | Jean vs. Gigastorage Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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