Correlation Between JSC National and DS Smith
Can any of the company-specific risk be diversified away by investing in both JSC National and DS Smith 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 JSC National and DS Smith into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JSC National Atomic and DS Smith PLC, you can compare the effects of market volatilities on JSC National and DS Smith 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 JSC National with a short position of DS Smith. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSC National and DS Smith.
Diversification Opportunities for JSC National and DS Smith
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JSC and SMDS is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding JSC National Atomic and DS Smith PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DS Smith PLC and JSC National 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 JSC National Atomic are associated (or correlated) with DS Smith. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DS Smith PLC has no effect on the direction of JSC National i.e., JSC National and DS Smith go up and down completely randomly.
Pair Corralation between JSC National and DS Smith
Assuming the 90 days trading horizon JSC National is expected to generate 4.67 times less return on investment than DS Smith. But when comparing it to its historical volatility, JSC National Atomic is 1.91 times less risky than DS Smith. It trades about 0.05 of its potential returns per unit of risk. DS Smith PLC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 47,000 in DS Smith PLC on September 13, 2024 and sell it today you would earn a total of 6,900 from holding DS Smith PLC or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
JSC National Atomic vs. DS Smith PLC
Performance |
| Timeline |
| JSC National Atomic |
| DS Smith PLC |
JSC National and DS Smith Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JSC National and DS Smith
The main advantage of trading using opposite JSC National and DS Smith positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JSC National position performs unexpectedly, DS Smith 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 DS Smith will offset losses from the drop in DS Smith's long position.| JSC National vs. Zoom Video Communications | JSC National vs. Enbridge | JSC National vs. Endo International PLC | JSC National vs. Bank of Georgia |
| DS Smith vs. Federal Realty Investment | DS Smith vs. Eastman Chemical Co | DS Smith vs. Oakley Capital Investments | DS Smith vs. Aberdeen Diversified Income |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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