Correlation Between Spectra and JEMTEC
Can any of the company-specific risk be diversified away by investing in both Spectra and JEMTEC 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 Spectra and JEMTEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spectra and JEMTEC Inc, you can compare the effects of market volatilities on Spectra and JEMTEC 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 Spectra with a short position of JEMTEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectra and JEMTEC.
Diversification Opportunities for Spectra and JEMTEC
Excellent diversification
The 3 months correlation between Spectra and JEMTEC is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Spectra and JEMTEC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JEMTEC Inc and Spectra 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 Spectra are associated (or correlated) with JEMTEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JEMTEC Inc has no effect on the direction of Spectra i.e., Spectra and JEMTEC go up and down completely randomly.
Pair Corralation between Spectra and JEMTEC
Assuming the 90 days horizon Spectra is expected to generate 2.67 times more return on investment than JEMTEC. However, Spectra is 2.67 times more volatile than JEMTEC Inc. It trades about 0.1 of its potential returns per unit of risk. JEMTEC Inc is currently generating about 0.05 per unit of risk. If you would invest 19.00 in Spectra on October 24, 2024 and sell it today you would earn a total of 1.00 from holding Spectra or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spectra vs. JEMTEC Inc
Performance |
| Timeline |
| Spectra |
| JEMTEC Inc |
Spectra and JEMTEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spectra and JEMTEC
The main advantage of trading using opposite Spectra and JEMTEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectra position performs unexpectedly, JEMTEC 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 JEMTEC will offset losses from the drop in JEMTEC's long position.| Spectra vs. Magna Mining | Spectra vs. Leading Edge Materials | Spectra vs. Altair Resources | Spectra vs. Calibre Mining Corp |
| JEMTEC vs. E L Financial Corp | JEMTEC vs. Brookfield Office Properties | JEMTEC vs. Hemisphere Energy | JEMTEC vs. US Financial 15 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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