Correlation Between Jaguar Global and Innovative International
Can any of the company-specific risk be diversified away by investing in both Jaguar Global and Innovative International 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 Jaguar Global and Innovative International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jaguar Global Growth and Innovative International Acquisition, you can compare the effects of market volatilities on Jaguar Global and Innovative International 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 Jaguar Global with a short position of Innovative International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jaguar Global and Innovative International.
Diversification Opportunities for Jaguar Global and Innovative International
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jaguar and Innovative is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jaguar Global Growth and Innovative International Acqui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative International and Jaguar Global 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 Jaguar Global Growth are associated (or correlated) with Innovative International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative International has no effect on the direction of Jaguar Global i.e., Jaguar Global and Innovative International go up and down completely randomly.
Pair Corralation between Jaguar Global and Innovative International
Assuming the 90 days horizon Jaguar Global Growth is expected to generate 1.36 times more return on investment than Innovative International. However, Jaguar Global is 1.36 times more volatile than Innovative International Acquisition. It trades about 0.11 of its potential returns per unit of risk. Innovative International Acquisition is currently generating about 0.11 per unit of risk. If you would invest 6.00 in Jaguar Global Growth on August 26, 2024 and sell it today you would lose (2.00) from holding Jaguar Global Growth or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.84% |
| Values | Daily Returns |
Jaguar Global Growth vs. Innovative International Acqui
Performance |
| Timeline |
| Jaguar Global Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Innovative International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jaguar Global and Innovative International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jaguar Global and Innovative International
The main advantage of trading using opposite Jaguar Global and Innovative International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jaguar Global position performs unexpectedly, Innovative International 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 Innovative International will offset losses from the drop in Innovative International's long position.The idea behind Jaguar Global Growth and Innovative International Acquisition 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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