Correlation Between Johns Lyng and Patriot Battery
Can any of the company-specific risk be diversified away by investing in both Johns Lyng and Patriot Battery 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 Johns Lyng and Patriot Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johns Lyng Group and Patriot Battery Metals, you can compare the effects of market volatilities on Johns Lyng and Patriot Battery 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 Johns Lyng with a short position of Patriot Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johns Lyng and Patriot Battery.
Diversification Opportunities for Johns Lyng and Patriot Battery
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Johns and Patriot is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Johns Lyng Group and Patriot Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patriot Battery Metals and Johns Lyng 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 Johns Lyng Group are associated (or correlated) with Patriot Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patriot Battery Metals has no effect on the direction of Johns Lyng i.e., Johns Lyng and Patriot Battery go up and down completely randomly.
Pair Corralation between Johns Lyng and Patriot Battery
Assuming the 90 days trading horizon Johns Lyng Group is expected to under-perform the Patriot Battery. But the stock apears to be less risky and, when comparing its historical volatility, Johns Lyng Group is 3.74 times less risky than Patriot Battery. The stock trades about -0.37 of its potential returns per unit of risk. The Patriot Battery Metals is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Patriot Battery Metals on September 14, 2024 and sell it today you would lose (5.00) from holding Patriot Battery Metals or give up 13.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johns Lyng Group vs. Patriot Battery Metals
Performance |
| Timeline |
| Johns Lyng Group |
| Patriot Battery Metals |
Johns Lyng and Patriot Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johns Lyng and Patriot Battery
The main advantage of trading using opposite Johns Lyng and Patriot Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johns Lyng position performs unexpectedly, Patriot Battery 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 Patriot Battery will offset losses from the drop in Patriot Battery's long position.| Johns Lyng vs. Health and Plant | Johns Lyng vs. Wt Financial Group | Johns Lyng vs. Regis Healthcare | Johns Lyng vs. Oneview Healthcare PLC |
| Patriot Battery vs. Fisher Paykel Healthcare | Patriot Battery vs. Aurelia Metals | Patriot Battery vs. Sky Metals | Patriot Battery vs. MetalsGrove Mining |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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