Correlation Between Allgens Medical and Jadard Technology

Can any of the company-specific risk be diversified away by investing in both Allgens Medical and Jadard Technology 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 Allgens Medical and Jadard Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allgens Medical Technology and Jadard Technology A, you can compare the effects of market volatilities on Allgens Medical and Jadard Technology 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 Allgens Medical with a short position of Jadard Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allgens Medical and Jadard Technology.

Diversification Opportunities for Allgens Medical and Jadard Technology

0.4

Correlation Coefficient

Allgens Medical  Jadard Technology

Very weak diversification

The 3 months correlation between Allgens and Jadard is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Allgens Medical Technology and Jadard Technology A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadard Technology and Allgens Medical 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 Allgens Medical Technology are associated (or correlated) with Jadard Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadard Technology has no effect on the direction of Allgens Medical i.e., Allgens Medical and Jadard Technology go up and down completely randomly.

Pair Corralation between Allgens Medical and Jadard Technology

Assuming the 90 days trading horizon Allgens Medical is expected to generate 4.05 times less return on investment than Jadard Technology. But when comparing it to its historical volatility, Allgens Medical Technology is 1.55 times less risky than Jadard Technology. It trades about 0.02 of its potential returns per unit of risk. Jadard Technology A is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,078  in Jadard Technology A on October 9, 2024 and sell it today you would earn a total of  137.00  from holding Jadard Technology A or generate 6.59% return on investment over 90 days.

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

Allgens Medical Technology  vs.  Jadard Technology A

Allgens Medical Tech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allgens Medical Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Allgens Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jadard Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jadard Technology A are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jadard Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Allgens Medical and Jadard Technology

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

The idea behind Allgens Medical Technology and Jadard Technology A 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.