Correlation Between Future Generation and Janison Education
Can any of the company-specific risk be diversified away by investing in both Future Generation and Janison Education 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 Future Generation and Janison Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Future Generation Australia and Janison Education Group, you can compare the effects of market volatilities on Future Generation and Janison Education 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 Future Generation with a short position of Janison Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Future Generation and Janison Education.
Diversification Opportunities for Future Generation and Janison Education
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Future and Janison is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Future Generation Australia and Janison Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janison Education and Future Generation 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 Future Generation Australia are associated (or correlated) with Janison Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janison Education has no effect on the direction of Future Generation i.e., Future Generation and Janison Education go up and down completely randomly.
Pair Corralation between Future Generation and Janison Education
Assuming the 90 days trading horizon Future Generation Australia is expected to generate 0.24 times more return on investment than Janison Education. However, Future Generation Australia is 4.25 times less risky than Janison Education. It trades about 0.1 of its potential returns per unit of risk. Janison Education Group is currently generating about -0.04 per unit of risk. If you would invest 113.00 in Future Generation Australia on August 31, 2024 and sell it today you would earn a total of 16.00 from holding Future Generation Australia or generate 14.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Future Generation Australia vs. Janison Education Group
Performance |
| Timeline |
| Future Generation |
| Janison Education |
Future Generation and Janison Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Future Generation and Janison Education
The main advantage of trading using opposite Future Generation and Janison Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Future Generation position performs unexpectedly, Janison Education 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 Janison Education will offset losses from the drop in Janison Education's long position.| Future Generation vs. Aneka Tambang Tbk | Future Generation vs. Macquarie Group | Future Generation vs. Challenger | Future Generation vs. BHP Group Limited |
| Janison Education vs. Amani Gold | Janison Education vs. A1 Investments Resources | Janison Education vs. Coronado Global Resources | Janison Education vs. Hutchison Telecommunications |
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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