Correlation Between Jade Leader and Highway 50
Can any of the company-specific risk be diversified away by investing in both Jade Leader and Highway 50 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 Jade Leader and Highway 50 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jade Leader Corp and Highway 50 Gold, you can compare the effects of market volatilities on Jade Leader and Highway 50 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 Jade Leader with a short position of Highway 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jade Leader and Highway 50.
Diversification Opportunities for Jade Leader and Highway 50
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jade and Highway is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jade Leader Corp and Highway 50 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway 50 Gold and Jade Leader 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 Jade Leader Corp are associated (or correlated) with Highway 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway 50 Gold has no effect on the direction of Jade Leader i.e., Jade Leader and Highway 50 go up and down completely randomly.
Pair Corralation between Jade Leader and Highway 50
Assuming the 90 days trading horizon Jade Leader Corp is expected to generate 5.33 times more return on investment than Highway 50. However, Jade Leader is 5.33 times more volatile than Highway 50 Gold. It trades about 0.15 of its potential returns per unit of risk. Highway 50 Gold is currently generating about 0.02 per unit of risk. If you would invest 3.00 in Jade Leader Corp on November 3, 2024 and sell it today you would earn a total of 1.00 from holding Jade Leader Corp or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jade Leader Corp vs. Highway 50 Gold
Performance |
| Timeline |
| Jade Leader Corp |
| Highway 50 Gold |
Jade Leader and Highway 50 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jade Leader and Highway 50
The main advantage of trading using opposite Jade Leader and Highway 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jade Leader position performs unexpectedly, Highway 50 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 Highway 50 will offset losses from the drop in Highway 50's long position.| Jade Leader vs. 2028 Investment Grade | Jade Leader vs. Maple Peak Investments | Jade Leader vs. Brookfield Asset Management | Jade Leader vs. Costco Wholesale Corp |
| Highway 50 vs. Mako Mining Corp | Highway 50 vs. NeXGold Mining Corp | Highway 50 vs. Genius Metals | Highway 50 vs. McEwen Mining |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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