Correlation Between Jafron Biomedical and Touchstone International

Can any of the company-specific risk be diversified away by investing in both Jafron Biomedical and Touchstone International 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 Jafron Biomedical and Touchstone International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jafron Biomedical Co and Touchstone International Medical, you can compare the effects of market volatilities on Jafron Biomedical and Touchstone International 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 Jafron Biomedical with a short position of Touchstone International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jafron Biomedical and Touchstone International.

Diversification Opportunities for Jafron Biomedical and Touchstone International

-0.25

Correlation Coefficient

Jafron Biomedical  Touchstone International

Very good diversification

The 3 months correlation between Jafron and Touchstone is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Jafron Biomedical Co and Touchstone International Medic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone International and Jafron Biomedical 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 Jafron Biomedical Co are associated (or correlated) with Touchstone International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone International has no effect on the direction of Jafron Biomedical i.e., Jafron Biomedical and Touchstone International go up and down completely randomly.

Pair Corralation between Jafron Biomedical and Touchstone International

Assuming the 90 days trading horizon Jafron Biomedical Co is expected to generate 1.01 times more return on investment than Touchstone International. However, Jafron Biomedical is 1.01 times more volatile than Touchstone International Medical. It trades about 0.0 of its potential returns per unit of risk. Touchstone International Medical is currently generating about 0.0 per unit of risk. If you would invest  2,964  in Jafron Biomedical Co on December 2, 2024 and sell it today you would lose (391.00) from holding Jafron Biomedical Co or give up 13.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Jafron Biomedical Co  vs.  Touchstone International Medic

Jafron Biomedical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jafron Biomedical Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Touchstone International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Touchstone International Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Touchstone International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jafron Biomedical and Touchstone International

The main advantage of trading using opposite Jafron Biomedical and Touchstone International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jafron Biomedical position performs unexpectedly, Touchstone International 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 Touchstone International will offset losses from the drop in Touchstone International's long position.

The idea behind Jafron Biomedical Co and Touchstone International Medical 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.