Correlation Between Jasmine International and International Research
Can any of the company-specific risk be diversified away by investing in both Jasmine International and International Research 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 Jasmine International and International Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jasmine International Public and International Research, you can compare the effects of market volatilities on Jasmine International and International Research 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 Jasmine International with a short position of International Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jasmine International and International Research.
Diversification Opportunities for Jasmine International and International Research
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jasmine and International is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Jasmine International Public and International Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Research and Jasmine International 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 Jasmine International Public are associated (or correlated) with International Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Research has no effect on the direction of Jasmine International i.e., Jasmine International and International Research go up and down completely randomly.
Pair Corralation between Jasmine International and International Research
Assuming the 90 days trading horizon Jasmine International is expected to generate 12.5 times less return on investment than International Research. But when comparing it to its historical volatility, Jasmine International Public is 12.05 times less risky than International Research. It trades about 0.04 of its potential returns per unit of risk. International Research is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 97.00 in International Research on August 26, 2024 and sell it today you would lose (45.00) from holding International Research or give up 46.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jasmine International Public vs. International Research
Performance |
| Timeline |
| Jasmine International |
| International Research |
Jasmine International and International Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jasmine International and International Research
The main advantage of trading using opposite Jasmine International and International Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jasmine International position performs unexpectedly, International Research 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 International Research will offset losses from the drop in International Research's long position.| Jasmine International vs. Indara Insurance Public | Jasmine International vs. Regional Container Lines | Jasmine International vs. Regional Container Lines | Jasmine International vs. Mahachai Hospital Public |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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