Correlation Between Farglory FTZ and Jetwell Computer

Can any of the company-specific risk be diversified away by investing in both Farglory FTZ and Jetwell Computer 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 Farglory FTZ and Jetwell Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Farglory FTZ Investment and Jetwell Computer Co, you can compare the effects of market volatilities on Farglory FTZ and Jetwell Computer 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 Farglory FTZ with a short position of Jetwell Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farglory FTZ and Jetwell Computer.

Diversification Opportunities for Farglory FTZ and Jetwell Computer

-0.27

Correlation Coefficient

Farglory FTZ  Jetwell Computer

Very good diversification

The 3 months correlation between Farglory and Jetwell is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Farglory FTZ Investment and Jetwell Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetwell Computer and Farglory FTZ 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 Farglory FTZ Investment are associated (or correlated) with Jetwell Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetwell Computer has no effect on the direction of Farglory FTZ i.e., Farglory FTZ and Jetwell Computer go up and down completely randomly.

Pair Corralation between Farglory FTZ and Jetwell Computer

Assuming the 90 days trading horizon Farglory FTZ Investment is expected to under-perform the Jetwell Computer. But the stock apears to be less risky and, when comparing its historical volatility, Farglory FTZ Investment is 1.51 times less risky than Jetwell Computer. The stock trades about -0.01 of its potential returns per unit of risk. The Jetwell Computer Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5,130  in Jetwell Computer Co on October 4, 2024 and sell it today you would earn a total of  13,970  from holding Jetwell Computer Co or generate 272.32% return on investment over 90 days.

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

Farglory FTZ Investment  vs.  Jetwell Computer Co

Farglory FTZ Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Farglory FTZ Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Jetwell Computer

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jetwell Computer Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Jetwell Computer showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Farglory FTZ and Jetwell Computer

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

The idea behind Farglory FTZ Investment and Jetwell Computer 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.