Correlation Between Natural Health and Jumia Technologies
Can any of the company-specific risk be diversified away by investing in both Natural Health and Jumia Technologies 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 Natural Health and Jumia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trend and Jumia Technologies AG, you can compare the effects of market volatilities on Natural Health and Jumia Technologies 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 Natural Health with a short position of Jumia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Jumia Technologies.
Diversification Opportunities for Natural Health and Jumia Technologies
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Natural and Jumia is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trend and Jumia Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jumia Technologies and Natural Health 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 Natural Health Trend are associated (or correlated) with Jumia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jumia Technologies has no effect on the direction of Natural Health i.e., Natural Health and Jumia Technologies go up and down completely randomly.
Pair Corralation between Natural Health and Jumia Technologies
Given the investment horizon of 90 days Natural Health is expected to generate 8.71 times less return on investment than Jumia Technologies. But when comparing it to its historical volatility, Natural Health Trend is 3.29 times less risky than Jumia Technologies. It trades about 0.02 of its potential returns per unit of risk. Jumia Technologies AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 246.00 in Jumia Technologies AG on October 25, 2024 and sell it today you would earn a total of 149.00 from holding Jumia Technologies AG or generate 60.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trend vs. Jumia Technologies AG
Performance |
| Timeline |
| Natural Health Trend |
| Jumia Technologies |
Natural Health and Jumia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Jumia Technologies
The main advantage of trading using opposite Natural Health and Jumia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, Jumia Technologies 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 Jumia Technologies will offset losses from the drop in Jumia Technologies' long position.| Natural Health vs. Liquidity Services | Natural Health vs. Hour Loop | Natural Health vs. Qurate Retail Series | Natural Health vs. Emerge Commerce |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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