Correlation Between IAR Systems and Jetpak Top
Can any of the company-specific risk be diversified away by investing in both IAR Systems and Jetpak Top 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 IAR Systems and Jetpak Top into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IAR Systems Group and Jetpak Top Holding, you can compare the effects of market volatilities on IAR Systems and Jetpak Top 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 IAR Systems with a short position of Jetpak Top. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAR Systems and Jetpak Top.
Diversification Opportunities for IAR Systems and Jetpak Top
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IAR and Jetpak is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding IAR Systems Group and Jetpak Top Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetpak Top Holding and IAR Systems 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 IAR Systems Group are associated (or correlated) with Jetpak Top. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetpak Top Holding has no effect on the direction of IAR Systems i.e., IAR Systems and Jetpak Top go up and down completely randomly.
Pair Corralation between IAR Systems and Jetpak Top
Assuming the 90 days trading horizon IAR Systems Group is expected to generate 2.22 times more return on investment than Jetpak Top. However, IAR Systems is 2.22 times more volatile than Jetpak Top Holding. It trades about 0.33 of its potential returns per unit of risk. Jetpak Top Holding is currently generating about -0.07 per unit of risk. If you would invest 12,150 in IAR Systems Group on September 1, 2024 and sell it today you would earn a total of 2,350 from holding IAR Systems Group or generate 19.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAR Systems Group vs. Jetpak Top Holding
Performance |
| Timeline |
| IAR Systems Group |
| Jetpak Top Holding |
IAR Systems and Jetpak Top Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAR Systems and Jetpak Top
The main advantage of trading using opposite IAR Systems and Jetpak Top positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAR Systems position performs unexpectedly, Jetpak Top 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 Jetpak Top will offset losses from the drop in Jetpak Top's long position.| IAR Systems vs. CellaVision AB | IAR Systems vs. HMS Networks AB | IAR Systems vs. Enea AB | IAR Systems vs. Know IT AB |
| Jetpak Top vs. Alimak Hek Group | Jetpak Top vs. Balco Group AB | Jetpak Top vs. Bulten AB | Jetpak Top vs. Rejlers AB |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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