Correlation Between Energy Absolute and Jay Mart
Can any of the company-specific risk be diversified away by investing in both Energy Absolute and Jay Mart 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 Energy Absolute and Jay Mart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Absolute Public and Jay Mart Public, you can compare the effects of market volatilities on Energy Absolute and Jay Mart 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 Energy Absolute with a short position of Jay Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Absolute and Jay Mart.
Diversification Opportunities for Energy Absolute and Jay Mart
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Energy and Jay is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Energy Absolute Public and Jay Mart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jay Mart Public and Energy Absolute 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 Energy Absolute Public are associated (or correlated) with Jay Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jay Mart Public has no effect on the direction of Energy Absolute i.e., Energy Absolute and Jay Mart go up and down completely randomly.
Pair Corralation between Energy Absolute and Jay Mart
Assuming the 90 days horizon Energy Absolute Public is expected to under-perform the Jay Mart. In addition to that, Energy Absolute is 1.18 times more volatile than Jay Mart Public. It trades about -0.1 of its total potential returns per unit of risk. Jay Mart Public is currently generating about -0.04 per unit of volatility. If you would invest 4,133 in Jay Mart Public on August 26, 2024 and sell it today you would lose (2,773) from holding Jay Mart Public or give up 67.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Energy Absolute Public vs. Jay Mart Public
Performance |
| Timeline |
| Energy Absolute Public |
| Jay Mart Public |
Energy Absolute and Jay Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Absolute and Jay Mart
The main advantage of trading using opposite Energy Absolute and Jay Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Absolute position performs unexpectedly, Jay Mart 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 Jay Mart will offset losses from the drop in Jay Mart's long position.| Energy Absolute vs. PTT Oil and | Energy Absolute vs. Power Solution Technologies | Energy Absolute vs. Star Petroleum Refining | Energy Absolute vs. Prima Marine Public |
| Jay Mart vs. JMT Network Services | Jay Mart vs. Com7 PCL | Jay Mart vs. KCE Electronics Public | Jay Mart vs. Singer Thailand Public |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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