Correlation Between Jumia Technologies and Natural Health
Can any of the company-specific risk be diversified away by investing in both Jumia Technologies and Natural Health 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 Jumia Technologies and Natural Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jumia Technologies AG and Natural Health Trend, you can compare the effects of market volatilities on Jumia Technologies and Natural Health 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 Jumia Technologies with a short position of Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jumia Technologies and Natural Health.
Diversification Opportunities for Jumia Technologies and Natural Health
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jumia and Natural is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Jumia Technologies AG and Natural Health Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trend and Jumia Technologies 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 Jumia Technologies AG are associated (or correlated) with Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trend has no effect on the direction of Jumia Technologies i.e., Jumia Technologies and Natural Health go up and down completely randomly.
Pair Corralation between Jumia Technologies and Natural Health
Given the investment horizon of 90 days Jumia Technologies is expected to generate 3.8 times less return on investment than Natural Health. In addition to that, Jumia Technologies is 1.21 times more volatile than Natural Health Trend. It trades about 0.03 of its total potential returns per unit of risk. Natural Health Trend is currently generating about 0.14 per unit of volatility. If you would invest 470.00 in Natural Health Trend on November 4, 2024 and sell it today you would earn a total of 34.00 from holding Natural Health Trend or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jumia Technologies AG vs. Natural Health Trend
Performance |
| Timeline |
| Jumia Technologies |
| Natural Health Trend |
Jumia Technologies and Natural Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jumia Technologies and Natural Health
The main advantage of trading using opposite Jumia Technologies and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jumia Technologies position performs unexpectedly, Natural Health 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 Natural Health will offset losses from the drop in Natural Health's long position.| Jumia Technologies vs. Sea | Jumia Technologies vs. MercadoLibre | Jumia Technologies vs. PDD Holdings | Jumia Technologies vs. JD Inc Adr |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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