Correlation Between White Fox and Ijj

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

By analyzing existing cross correlation between White Fox Ventures and Ijj Corporation, you can compare the effects of market volatilities on White Fox and Ijj 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 White Fox with a short position of Ijj. Check out your portfolio center. Please also check ongoing floating volatility patterns of White Fox and Ijj.

Diversification Opportunities for White Fox and Ijj

0.19

Correlation Coefficient

White Fox  Ijj

Average diversification

The 3 months correlation between White and Ijj is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding White Fox Ventures and Ijj Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ijj Corporation and White Fox 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 White Fox Ventures are associated (or correlated) with Ijj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ijj Corporation has no effect on the direction of White Fox i.e., White Fox and Ijj go up and down completely randomly.

Pair Corralation between White Fox and Ijj

Given the investment horizon of 90 days White Fox Ventures is expected to under-perform the Ijj. In addition to that, White Fox is 1.02 times more volatile than Ijj Corporation. It trades about -0.3 of its total potential returns per unit of risk. Ijj Corporation is currently generating about -0.02 per unit of volatility. If you would invest  0.04  in Ijj Corporation on September 23, 2024 and sell it today you would lose (0.01) from holding Ijj Corporation or give up 25.0% of portfolio value over 90 days.

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

White Fox Ventures  vs.  Ijj Corp.

White Fox Ventures

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in White Fox Ventures are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, White Fox showed solid returns over the last few months and may actually be approaching a breakup point.

Ijj Corporation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ijj Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking indicators, Ijj is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with White Fox and Ijj

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

The idea behind White Fox Ventures and Ijj Corporation 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.