Correlation Between Xai and JAR

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Can any of the company-specific risk be diversified away by investing in both Xai and JAR 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 Xai and JAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xai and JAR, you can compare the effects of market volatilities on Xai and JAR 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 Xai with a short position of JAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xai and JAR.

Diversification Opportunities for Xai and JAR

0.2
  Correlation Coefficient
 Xai
 JAR

Modest diversification

The 3 months correlation between Xai and JAR is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Xai and JAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAR and Xai 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 Xai are associated (or correlated) with JAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAR has no effect on the direction of Xai i.e., Xai and JAR go up and down completely randomly.

Pair Corralation between Xai and JAR

Assuming the 90 days trading horizon Xai is expected to under-perform the JAR. In addition to that, Xai is 2.58 times more volatile than JAR. It trades about -0.3 of its total potential returns per unit of risk. JAR is currently generating about -0.09 per unit of volatility. If you would invest  0.39  in JAR on November 7, 2024 and sell it today you would lose (0.03) from holding JAR or give up 7.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy91.3%
ValuesDaily Returns

Xai  vs.  JAR

 Performance 
       Timeline  
Xai 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Xai has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's forward indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Xai shareholders.
JAR 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in JAR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, JAR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Xai and JAR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xai and JAR

The main advantage of trading using opposite Xai and JAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xai position performs unexpectedly, JAR 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 JAR will offset losses from the drop in JAR's long position.
The idea behind Xai and JAR 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 CEOs Directory module to screen CEOs from public companies around the world.

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