Correlation Between FutureFuel Corp and JSR Corp
Can any of the company-specific risk be diversified away by investing in both FutureFuel Corp and JSR Corp 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 FutureFuel Corp and JSR Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FutureFuel Corp and JSR Corp, you can compare the effects of market volatilities on FutureFuel Corp and JSR Corp 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 FutureFuel Corp with a short position of JSR Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FutureFuel Corp and JSR Corp.
Diversification Opportunities for FutureFuel Corp and JSR Corp
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FutureFuel and JSR is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding FutureFuel Corp and JSR Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSR Corp and FutureFuel Corp 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 FutureFuel Corp are associated (or correlated) with JSR Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSR Corp has no effect on the direction of FutureFuel Corp i.e., FutureFuel Corp and JSR Corp go up and down completely randomly.
Pair Corralation between FutureFuel Corp and JSR Corp
Allowing for the 90-day total investment horizon FutureFuel Corp is expected to generate 1.73 times less return on investment than JSR Corp. In addition to that, FutureFuel Corp is 1.61 times more volatile than JSR Corp. It trades about 0.01 of its total potential returns per unit of risk. JSR Corp is currently generating about 0.03 per unit of volatility. If you would invest 2,077 in JSR Corp on September 2, 2024 and sell it today you would earn a total of 449.00 from holding JSR Corp or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.76% |
| Values | Daily Returns |
FutureFuel Corp vs. JSR Corp
Performance |
| Timeline |
| FutureFuel Corp |
| JSR Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
FutureFuel Corp and JSR Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FutureFuel Corp and JSR Corp
The main advantage of trading using opposite FutureFuel Corp and JSR Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FutureFuel Corp position performs unexpectedly, JSR Corp 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 JSR Corp will offset losses from the drop in JSR Corp's long position.| FutureFuel Corp vs. Linde plc Ordinary | FutureFuel Corp vs. Air Products and | FutureFuel Corp vs. Aquagold International | FutureFuel Corp vs. Thrivent High Yield |
| JSR Corp vs. Orion Engineered Carbons | JSR Corp vs. Select Energy Services | JSR Corp vs. Perimeter Solutions SA | JSR Corp vs. FutureFuel 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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