Correlation Between JCK Hospitality and ABSOLUTE CLEAN
Can any of the company-specific risk be diversified away by investing in both JCK Hospitality and ABSOLUTE CLEAN 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 JCK Hospitality and ABSOLUTE CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JCK Hospitality Public and ABSOLUTE CLEAN ENERGY, you can compare the effects of market volatilities on JCK Hospitality and ABSOLUTE CLEAN 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 JCK Hospitality with a short position of ABSOLUTE CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of JCK Hospitality and ABSOLUTE CLEAN.
Diversification Opportunities for JCK Hospitality and ABSOLUTE CLEAN
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between JCK and ABSOLUTE is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding JCK Hospitality Public and ABSOLUTE CLEAN ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABSOLUTE CLEAN ENERGY and JCK Hospitality 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 JCK Hospitality Public are associated (or correlated) with ABSOLUTE CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABSOLUTE CLEAN ENERGY has no effect on the direction of JCK Hospitality i.e., JCK Hospitality and ABSOLUTE CLEAN go up and down completely randomly.
Pair Corralation between JCK Hospitality and ABSOLUTE CLEAN
Assuming the 90 days trading horizon JCK Hospitality Public is expected to generate 4.34 times more return on investment than ABSOLUTE CLEAN. However, JCK Hospitality is 4.34 times more volatile than ABSOLUTE CLEAN ENERGY. It trades about 0.05 of its potential returns per unit of risk. ABSOLUTE CLEAN ENERGY is currently generating about -0.18 per unit of risk. If you would invest 3.00 in JCK Hospitality Public on September 1, 2024 and sell it today you would lose (1.00) from holding JCK Hospitality Public or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JCK Hospitality Public vs. ABSOLUTE CLEAN ENERGY
Performance |
| Timeline |
| JCK Hospitality Public |
| ABSOLUTE CLEAN ENERGY |
JCK Hospitality and ABSOLUTE CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JCK Hospitality and ABSOLUTE CLEAN
The main advantage of trading using opposite JCK Hospitality and ABSOLUTE CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JCK Hospitality position performs unexpectedly, ABSOLUTE CLEAN 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 ABSOLUTE CLEAN will offset losses from the drop in ABSOLUTE CLEAN's long position.| JCK Hospitality vs. Porn Prom Metal | JCK Hospitality vs. CENTRAL RETAIL P | JCK Hospitality vs. Charoen Pokphand Foods | JCK Hospitality vs. DOHOME |
| ABSOLUTE CLEAN vs. Asia Biomass Public | ABSOLUTE CLEAN vs. JCK Hospitality Public | ABSOLUTE CLEAN vs. JCK International Public | ABSOLUTE CLEAN vs. Green Resources Public |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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