Correlation Between J J and SCANDMEDICAL SOLDK-040
Can any of the company-specific risk be diversified away by investing in both J J and SCANDMEDICAL SOLDK-040 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 J J and SCANDMEDICAL SOLDK-040 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J J SNACK and SCANDMEDICAL SOLDK 040, you can compare the effects of market volatilities on J J and SCANDMEDICAL SOLDK-040 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 J J with a short position of SCANDMEDICAL SOLDK-040. Check out your portfolio center. Please also check ongoing floating volatility patterns of J J and SCANDMEDICAL SOLDK-040.
Diversification Opportunities for J J and SCANDMEDICAL SOLDK-040
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JJ1 and SCANDMEDICAL is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding J J SNACK and SCANDMEDICAL SOLDK 040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDMEDICAL SOLDK 040 and J J 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 J J SNACK are associated (or correlated) with SCANDMEDICAL SOLDK-040. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDMEDICAL SOLDK 040 has no effect on the direction of J J i.e., J J and SCANDMEDICAL SOLDK-040 go up and down completely randomly.
Pair Corralation between J J and SCANDMEDICAL SOLDK-040
Assuming the 90 days trading horizon J J SNACK is expected to under-perform the SCANDMEDICAL SOLDK-040. But the stock apears to be less risky and, when comparing its historical volatility, J J SNACK is 1.34 times less risky than SCANDMEDICAL SOLDK-040. The stock trades about -0.35 of its potential returns per unit of risk. The SCANDMEDICAL SOLDK 040 is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 72.00 in SCANDMEDICAL SOLDK 040 on October 20, 2024 and sell it today you would lose (2.00) from holding SCANDMEDICAL SOLDK 040 or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J J SNACK vs. SCANDMEDICAL SOLDK 040
Performance |
| Timeline |
| J J SNACK |
| SCANDMEDICAL SOLDK 040 |
J J and SCANDMEDICAL SOLDK-040 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J J and SCANDMEDICAL SOLDK-040
The main advantage of trading using opposite J J and SCANDMEDICAL SOLDK-040 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J J position performs unexpectedly, SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 will offset losses from the drop in SCANDMEDICAL SOLDK-040's long position.The idea behind J J SNACK and SCANDMEDICAL SOLDK 040 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.| SCANDMEDICAL SOLDK-040 vs. Platinum Investment Management | SCANDMEDICAL SOLDK-040 vs. PennantPark Investment | SCANDMEDICAL SOLDK-040 vs. Perdoceo Education | SCANDMEDICAL SOLDK-040 vs. CeoTronics AG |
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 CEOs Directory module to screen CEOs from public companies around the world.
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