Correlation Between Avalon Holdings and JAN Old

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

By analyzing existing cross correlation between Avalon Holdings and JAN Old, you can compare the effects of market volatilities on Avalon Holdings and JAN Old 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 Avalon Holdings with a short position of JAN Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avalon Holdings and JAN Old.

Diversification Opportunities for Avalon Holdings and JAN Old

0.0

Correlation Coefficient

Avalon Holdings  JAN Old

Pay attention - limited upside

The 3 months correlation between Avalon and JAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Avalon Holdings and JAN Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAN Old and Avalon Holdings 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 Avalon Holdings are associated (or correlated) with JAN Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAN Old has no effect on the direction of Avalon Holdings i.e., Avalon Holdings and JAN Old go up and down completely randomly.

Pair Corralation between Avalon Holdings and JAN Old

If you would invest  317.00  in Avalon Holdings on December 18, 2024 and sell it today you would earn a total of  2.00  from holding Avalon Holdings or generate 0.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Avalon Holdings  vs.  JAN Old

Avalon Holdings

Risk-Adjusted Performance

Weak

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

JAN Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days JAN Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, JAN Old is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Avalon Holdings and JAN Old

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

The idea behind Avalon Holdings and JAN Old 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.