Correlation Between AstraZeneca PLC and Jadestone Energy
Can any of the company-specific risk be diversified away by investing in both AstraZeneca PLC and Jadestone Energy 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 AstraZeneca PLC and Jadestone Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstraZeneca PLC and Jadestone Energy, you can compare the effects of market volatilities on AstraZeneca PLC and Jadestone Energy 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 AstraZeneca PLC with a short position of Jadestone Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstraZeneca PLC and Jadestone Energy.
Diversification Opportunities for AstraZeneca PLC and Jadestone Energy
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AstraZeneca and Jadestone is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC and Jadestone Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadestone Energy and AstraZeneca PLC 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 AstraZeneca PLC are associated (or correlated) with Jadestone Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadestone Energy has no effect on the direction of AstraZeneca PLC i.e., AstraZeneca PLC and Jadestone Energy go up and down completely randomly.
Pair Corralation between AstraZeneca PLC and Jadestone Energy
Assuming the 90 days trading horizon AstraZeneca PLC is expected to generate 0.46 times more return on investment than Jadestone Energy. However, AstraZeneca PLC is 2.16 times less risky than Jadestone Energy. It trades about 0.01 of its potential returns per unit of risk. Jadestone Energy is currently generating about -0.04 per unit of risk. If you would invest 1,027,659 in AstraZeneca PLC on September 3, 2024 and sell it today you would earn a total of 27,741 from holding AstraZeneca PLC or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 87.22% |
| Values | Daily Returns |
AstraZeneca PLC vs. Jadestone Energy
Performance |
| Timeline |
| AstraZeneca PLC |
| Jadestone Energy |
AstraZeneca PLC and Jadestone Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstraZeneca PLC and Jadestone Energy
The main advantage of trading using opposite AstraZeneca PLC and Jadestone Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC position performs unexpectedly, Jadestone Energy 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 Jadestone Energy will offset losses from the drop in Jadestone Energy's long position.| AstraZeneca PLC vs. Made Tech Group | AstraZeneca PLC vs. Ashtead Technology Holdings | AstraZeneca PLC vs. Aurora Investment Trust | AstraZeneca PLC vs. Allianz Technology Trust |
| Jadestone Energy vs. Bankers Investment Trust | Jadestone Energy vs. Fresenius Medical Care | Jadestone Energy vs. Creo Medical Group | Jadestone Energy vs. Livermore Investments Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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