Correlation Between Alkaline Water and Jones Soda
Can any of the company-specific risk be diversified away by investing in both Alkaline Water and Jones Soda 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 Alkaline Water and Jones Soda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alkaline Water and Jones Soda Co, you can compare the effects of market volatilities on Alkaline Water and Jones Soda 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 Alkaline Water with a short position of Jones Soda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkaline Water and Jones Soda.
Diversification Opportunities for Alkaline Water and Jones Soda
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alkaline and Jones is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Alkaline Water and Jones Soda Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jones Soda and Alkaline Water 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 Alkaline Water are associated (or correlated) with Jones Soda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jones Soda has no effect on the direction of Alkaline Water i.e., Alkaline Water and Jones Soda go up and down completely randomly.
Pair Corralation between Alkaline Water and Jones Soda
Given the investment horizon of 90 days Alkaline Water is expected to under-perform the Jones Soda. In addition to that, Alkaline Water is 1.13 times more volatile than Jones Soda Co. It trades about -0.13 of its total potential returns per unit of risk. Jones Soda Co is currently generating about -0.01 per unit of volatility. If you would invest 21.00 in Jones Soda Co on August 27, 2024 and sell it today you would lose (1.00) from holding Jones Soda Co or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.14% |
| Values | Daily Returns |
Alkaline Water vs. Jones Soda Co
Performance |
| Timeline |
| Alkaline Water |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jones Soda |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alkaline Water and Jones Soda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alkaline Water and Jones Soda
The main advantage of trading using opposite Alkaline Water and Jones Soda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkaline Water position performs unexpectedly, Jones Soda 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 Jones Soda will offset losses from the drop in Jones Soda's long position.| Alkaline Water vs. Zevia Pbc | Alkaline Water vs. Hill Street Beverage | Alkaline Water vs. National Beverage Corp | Alkaline Water vs. Celsius Holdings |
| Jones Soda vs. Zevia Pbc | Jones Soda vs. Hill Street Beverage | Jones Soda vs. Flow Beverage Corp | Jones Soda vs. Fbec Worldwide |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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