Correlation Between Jones Soda and DNA Brands
Can any of the company-specific risk be diversified away by investing in both Jones Soda and DNA Brands 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 Jones Soda and DNA Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jones Soda Co and DNA Brands, you can compare the effects of market volatilities on Jones Soda and DNA Brands 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 Jones Soda with a short position of DNA Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jones Soda and DNA Brands.
Diversification Opportunities for Jones Soda and DNA Brands
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jones and DNA is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Jones Soda Co and DNA Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DNA Brands and Jones Soda 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 Jones Soda Co are associated (or correlated) with DNA Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DNA Brands has no effect on the direction of Jones Soda i.e., Jones Soda and DNA Brands go up and down completely randomly.
Pair Corralation between Jones Soda and DNA Brands
Given the investment horizon of 90 days Jones Soda Co is expected to under-perform the DNA Brands. But the otc stock apears to be less risky and, when comparing its historical volatility, Jones Soda Co is 5.68 times less risky than DNA Brands. The otc stock trades about -0.02 of its potential returns per unit of risk. The DNA Brands is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.17 in DNA Brands on August 31, 2024 and sell it today you would lose (0.16) from holding DNA Brands or give up 94.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 8.29% |
| Values | Daily Returns |
Jones Soda Co vs. DNA Brands
Performance |
| Timeline |
| Jones Soda |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DNA Brands |
Jones Soda and DNA Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jones Soda and DNA Brands
The main advantage of trading using opposite Jones Soda and DNA Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jones Soda position performs unexpectedly, DNA Brands 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 DNA Brands will offset losses from the drop in DNA Brands' long position.| Jones Soda vs. Zevia Pbc | Jones Soda vs. Hill Street Beverage | Jones Soda vs. Flow Beverage Corp | Jones Soda vs. Fbec Worldwide |
| DNA Brands vs. Rocky Mountain High | DNA Brands vs. Fbec Worldwide | DNA Brands vs. Greene Concepts | DNA Brands vs. Keurig Dr Pepper |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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