Correlation Between Holy Stone and Jetway Information

Can any of the company-specific risk be diversified away by investing in both Holy Stone and Jetway Information 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 Holy Stone and Jetway Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Holy Stone Enterprise and Jetway Information Co, you can compare the effects of market volatilities on Holy Stone and Jetway Information 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 Holy Stone with a short position of Jetway Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holy Stone and Jetway Information.

Diversification Opportunities for Holy Stone and Jetway Information

0.51

Correlation Coefficient

Holy Stone  Jetway Information

Very weak diversification

The 3 months correlation between Holy and Jetway is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Holy Stone Enterprise and Jetway Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetway Information and Holy Stone 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 Holy Stone Enterprise are associated (or correlated) with Jetway Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetway Information has no effect on the direction of Holy Stone i.e., Holy Stone and Jetway Information go up and down completely randomly.

Pair Corralation between Holy Stone and Jetway Information

Assuming the 90 days trading horizon Holy Stone Enterprise is expected to generate 0.35 times more return on investment than Jetway Information. However, Holy Stone Enterprise is 2.87 times less risky than Jetway Information. It trades about -0.1 of its potential returns per unit of risk. Jetway Information Co is currently generating about -0.2 per unit of risk. If you would invest  9,090  in Holy Stone Enterprise on October 25, 2024 and sell it today you would lose (380.00) from holding Holy Stone Enterprise or give up 4.18% of portfolio value over 90 days.

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

Holy Stone Enterprise  vs.  Jetway Information Co

Holy Stone Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Holy Stone Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Holy Stone is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Jetway Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jetway Information Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Holy Stone and Jetway Information

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

The idea behind Holy Stone Enterprise and Jetway Information Co 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.