Correlation Between JAR and JNT
Can any of the company-specific risk be diversified away by investing in both JAR 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 JAR and JNT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAR and JNT, you can compare the effects of market volatilities on JAR 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 JAR with a short position of JNT. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAR and JNT.
Diversification Opportunities for JAR and JNT
Very weak diversification
The 3 months correlation between JAR and JNT is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding JAR and JNT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNT and JAR 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 JAR 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 JAR i.e., JAR and JNT go up and down completely randomly.
Pair Corralation between JAR and JNT
If you would invest 0.27 in JAR on August 25, 2024 and sell it today you would earn a total of 0.08 from holding JAR or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
JAR vs. JNT
Performance |
| Timeline |
| JAR |
| JNT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
JAR and JNT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAR and JNT
The main advantage of trading using opposite JAR and JNT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAR 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 JAR 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |