Correlation Between JCHX Mining and Aluminum Corp

Can any of the company-specific risk be diversified away by investing in both JCHX Mining and Aluminum Corp 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 JCHX Mining and Aluminum Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JCHX Mining Management and Aluminum Corp of, you can compare the effects of market volatilities on JCHX Mining and Aluminum Corp 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 JCHX Mining with a short position of Aluminum Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of JCHX Mining and Aluminum Corp.

Diversification Opportunities for JCHX Mining and Aluminum Corp

0.75

Correlation Coefficient

JCHX Mining  Aluminum Corp

Poor diversification

The 3 months correlation between JCHX and Aluminum is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding JCHX Mining Management and Aluminum Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum Corp and JCHX Mining 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 JCHX Mining Management are associated (or correlated) with Aluminum Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum Corp has no effect on the direction of JCHX Mining i.e., JCHX Mining and Aluminum Corp go up and down completely randomly.

Pair Corralation between JCHX Mining and Aluminum Corp

Assuming the 90 days trading horizon JCHX Mining is expected to generate 1.16 times less return on investment than Aluminum Corp. In addition to that, JCHX Mining is 1.04 times more volatile than Aluminum Corp of. It trades about 0.09 of its total potential returns per unit of risk. Aluminum Corp of is currently generating about 0.11 per unit of volatility. If you would invest  658.00  in Aluminum Corp of on September 14, 2024 and sell it today you would earn a total of  127.00  from holding Aluminum Corp of or generate 19.3% return on investment over 90 days.

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

JCHX Mining Management  vs.  Aluminum Corp of

JCHX Mining Management

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JCHX Mining Management are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JCHX Mining sustained solid returns over the last few months and may actually be approaching a breakup point.

Aluminum Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aluminum Corp of are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aluminum Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JCHX Mining and Aluminum Corp

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

The idea behind JCHX Mining Management and Aluminum Corp of 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.