Correlation Between GSC and JNT
Can any of the company-specific risk be diversified away by investing in both GSC and JNT 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 GSC and JNT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSC and JNT, you can compare the effects of market volatilities on GSC and JNT 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 GSC with a short position of JNT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSC and JNT.
Diversification Opportunities for GSC and JNT
No risk reduction
The 3 months correlation between GSC and JNT is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding GSC and JNT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNT and GSC 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 GSC are associated (or correlated) with JNT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNT has no effect on the direction of GSC i.e., GSC and JNT go up and down completely randomly.
Pair Corralation between GSC and JNT
If you would invest 9.27 in JNT on August 25, 2024 and sell it today you would earn a total of 0.00 from holding JNT or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GSC vs. JNT
Performance |
| Timeline |
| GSC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| JNT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GSC and JNT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSC and JNT
The main advantage of trading using opposite GSC and JNT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSC position performs unexpectedly, JNT 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 JNT will offset losses from the drop in JNT's long position.The idea behind GSC and JNT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |