Correlation Between Joint Stock and Structured Products
Can any of the company-specific risk be diversified away by investing in both Joint Stock and Structured Products 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 Joint Stock and Structured Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joint Stock and Structured Products Corp, you can compare the effects of market volatilities on Joint Stock and Structured Products 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 Joint Stock with a short position of Structured Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joint Stock and Structured Products.
Diversification Opportunities for Joint Stock and Structured Products
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Joint and Structured is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Joint Stock and Structured Products Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Structured Products Corp and Joint Stock 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 Joint Stock are associated (or correlated) with Structured Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Structured Products Corp has no effect on the direction of Joint Stock i.e., Joint Stock and Structured Products go up and down completely randomly.
Pair Corralation between Joint Stock and Structured Products
Given the investment horizon of 90 days Joint Stock is expected to under-perform the Structured Products. In addition to that, Joint Stock is 2.29 times more volatile than Structured Products Corp. It trades about -0.05 of its total potential returns per unit of risk. Structured Products Corp is currently generating about 0.07 per unit of volatility. If you would invest 2,747 in Structured Products Corp on August 28, 2024 and sell it today you would earn a total of 156.00 from holding Structured Products Corp or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Joint Stock vs. Structured Products Corp
Performance |
| Timeline |
| Joint Stock |
| Structured Products Corp |
Joint Stock and Structured Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Joint Stock and Structured Products
The main advantage of trading using opposite Joint Stock and Structured Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joint Stock position performs unexpectedly, Structured Products 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 Structured Products will offset losses from the drop in Structured Products' long position.| Joint Stock vs. Chemours Co | Joint Stock vs. Parker Hannifin | Joint Stock vs. Jeld Wen Holding | Joint Stock vs. Western Copper and |
| Structured Products vs. DBA Sempra 5750 | Structured Products vs. CMS Energy Corp | Structured Products vs. American Financial Group | Structured Products vs. Maiden Holdings North |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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