Correlation Between Johnson Outdoors and Basic-Fit
Can any of the company-specific risk be diversified away by investing in both Johnson Outdoors and Basic-Fit 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 Johnson Outdoors and Basic-Fit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Outdoors and Basic Fit NV, you can compare the effects of market volatilities on Johnson Outdoors and Basic-Fit 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 Johnson Outdoors with a short position of Basic-Fit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Outdoors and Basic-Fit.
Diversification Opportunities for Johnson Outdoors and Basic-Fit
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Johnson and Basic-Fit is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Outdoors and Basic Fit NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basic Fit NV and Johnson Outdoors 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 Johnson Outdoors are associated (or correlated) with Basic-Fit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basic Fit NV has no effect on the direction of Johnson Outdoors i.e., Johnson Outdoors and Basic-Fit go up and down completely randomly.
Pair Corralation between Johnson Outdoors and Basic-Fit
Given the investment horizon of 90 days Johnson Outdoors is expected to generate 0.87 times more return on investment than Basic-Fit. However, Johnson Outdoors is 1.14 times less risky than Basic-Fit. It trades about 0.07 of its potential returns per unit of risk. Basic Fit NV is currently generating about -0.09 per unit of risk. If you would invest 3,237 in Johnson Outdoors on August 31, 2024 and sell it today you would earn a total of 92.00 from holding Johnson Outdoors or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Outdoors vs. Basic Fit NV
Performance |
| Timeline |
| Johnson Outdoors |
| Basic Fit NV |
Johnson Outdoors and Basic-Fit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Outdoors and Basic-Fit
The main advantage of trading using opposite Johnson Outdoors and Basic-Fit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Outdoors position performs unexpectedly, Basic-Fit 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 Basic-Fit will offset losses from the drop in Basic-Fit's long position.| Johnson Outdoors vs. Vista Outdoor | Johnson Outdoors vs. Clarus Corp | Johnson Outdoors vs. Escalade Incorporated | Johnson Outdoors vs. JAKKS Pacific |
| Basic-Fit vs. Yamaha Corp DRC | Basic-Fit vs. Planet Fitness | Basic-Fit vs. Plby Group | Basic-Fit vs. Shimano Inc ADR |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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