Correlation Between Solana and JNT
Can any of the company-specific risk be diversified away by investing in both Solana and JNT 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 Solana and JNT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solana and JNT, you can compare the effects of market volatilities on Solana and JNT 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 Solana with a short position of JNT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solana and JNT.
Diversification Opportunities for Solana and JNT
Poor diversification
The 3 months correlation between Solana and JNT is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Solana and JNT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNT and Solana 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 Solana are associated (or correlated) with JNT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNT has no effect on the direction of Solana i.e., Solana and JNT go up and down completely randomly.
Pair Corralation between Solana and JNT
Assuming the 90 days trading horizon Solana is expected to generate 11.75 times more return on investment than JNT. However, Solana is 11.75 times more volatile than JNT. It trades about 0.07 of its potential returns per unit of risk. JNT is currently generating about 0.13 per unit of risk. If you would invest 1,330 in Solana on August 23, 2024 and sell it today you would earn a total of 22,228 from holding Solana or generate 1671.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 55.85% |
| Values | Daily Returns |
Solana vs. JNT
Performance |
| Timeline |
| Solana |
| JNT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Solana and JNT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solana and JNT
The main advantage of trading using opposite Solana and JNT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solana position performs unexpectedly, JNT 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 JNT will offset losses from the drop in JNT's long position.The idea behind Solana and JNT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |