Correlation Between DNA Brands and Jones Soda
Can any of the company-specific risk be diversified away by investing in both DNA Brands and Jones Soda 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 DNA Brands and Jones Soda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DNA Brands and Jones Soda Co, you can compare the effects of market volatilities on DNA Brands and Jones Soda 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 DNA Brands with a short position of Jones Soda. Check out your portfolio center. Please also check ongoing floating volatility patterns of DNA Brands and Jones Soda.
Diversification Opportunities for DNA Brands and Jones Soda
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between DNA and Jones is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding DNA Brands and Jones Soda Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jones Soda and DNA Brands 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 DNA Brands are associated (or correlated) with Jones Soda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jones Soda has no effect on the direction of DNA Brands i.e., DNA Brands and Jones Soda go up and down completely randomly.
Pair Corralation between DNA Brands and Jones Soda
Given the investment horizon of 90 days DNA Brands is expected to generate 5.68 times more return on investment than Jones Soda. However, DNA Brands is 5.68 times more volatile than Jones Soda Co. It trades about 0.07 of its potential returns per unit of risk. Jones Soda Co is currently generating about -0.02 per unit of risk. If you would invest 0.17 in DNA Brands on August 31, 2024 and sell it today you would lose (0.16) from holding DNA Brands or give up 94.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 8.29% |
| Values | Daily Returns |
DNA Brands vs. Jones Soda Co
Performance |
| Timeline |
| DNA Brands |
| Jones Soda |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DNA Brands and Jones Soda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DNA Brands and Jones Soda
The main advantage of trading using opposite DNA Brands and Jones Soda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DNA Brands position performs unexpectedly, Jones Soda 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 Jones Soda will offset losses from the drop in Jones Soda's long position.| DNA Brands vs. Rocky Mountain High | DNA Brands vs. Fbec Worldwide | DNA Brands vs. Greene Concepts | DNA Brands vs. Keurig Dr Pepper |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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