Correlation Between Juniata Valley and Mach Natural
Can any of the company-specific risk be diversified away by investing in both Juniata Valley and Mach Natural 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 Juniata Valley and Mach Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juniata Valley Financial and Mach Natural Resources, you can compare the effects of market volatilities on Juniata Valley and Mach Natural 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 Juniata Valley with a short position of Mach Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniata Valley and Mach Natural.
Diversification Opportunities for Juniata Valley and Mach Natural
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Juniata and Mach is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and Mach Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mach Natural Resources and Juniata Valley 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 Juniata Valley Financial are associated (or correlated) with Mach Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mach Natural Resources has no effect on the direction of Juniata Valley i.e., Juniata Valley and Mach Natural go up and down completely randomly.
Pair Corralation between Juniata Valley and Mach Natural
Given the investment horizon of 90 days Juniata Valley Financial is expected to generate 1.78 times more return on investment than Mach Natural. However, Juniata Valley is 1.78 times more volatile than Mach Natural Resources. It trades about 0.03 of its potential returns per unit of risk. Mach Natural Resources is currently generating about 0.02 per unit of risk. If you would invest 1,190 in Juniata Valley Financial on September 3, 2024 and sell it today you would earn a total of 160.00 from holding Juniata Valley Financial or generate 13.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Juniata Valley Financial vs. Mach Natural Resources
Performance |
| Timeline |
| Juniata Valley Financial |
| Mach Natural Resources |
Juniata Valley and Mach Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juniata Valley and Mach Natural
The main advantage of trading using opposite Juniata Valley and Mach Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniata Valley position performs unexpectedly, Mach Natural 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 Mach Natural will offset losses from the drop in Mach Natural's long position.| Juniata Valley vs. FNB Inc | Juniata Valley vs. Apollo Bancorp | Juniata Valley vs. Commercial National Financial | Juniata Valley vs. Eastern Michigan Financial |
| Mach Natural vs. Relx PLC ADR | Mach Natural vs. Acco Brands | Mach Natural vs. Daily Journal Corp | Mach Natural vs. Dine Brands Global |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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