Correlation Between Azul SA and Juniata Valley

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

By analyzing existing cross correlation between Azul SA and Juniata Valley Financial, you can compare the effects of market volatilities on Azul SA and Juniata Valley 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 Azul SA with a short position of Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azul SA and Juniata Valley.

Diversification Opportunities for Azul SA and Juniata Valley

-0.83

Correlation Coefficient

Azul SA  Juniata Valley

Pay attention - limited upside

The 3 months correlation between Azul and Juniata is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Azul SA and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial and Azul SA 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 Azul SA are associated (or correlated) with Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of Azul SA i.e., Azul SA and Juniata Valley go up and down completely randomly.

Pair Corralation between Azul SA and Juniata Valley

Given the investment horizon of 90 days Azul SA is expected to under-perform the Juniata Valley. In addition to that, Azul SA is 2.02 times more volatile than Juniata Valley Financial. It trades about -0.12 of its total potential returns per unit of risk. Juniata Valley Financial is currently generating about 0.04 per unit of volatility. If you would invest  1,170  in Juniata Valley Financial on September 20, 2024 and sell it today you would earn a total of  155.00  from holding Juniata Valley Financial or generate 13.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	93.62%
Values	Daily Returns

Azul SA  vs.  Juniata Valley Financial

Azul SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Azul SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Juniata Valley Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Juniata Valley reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Azul SA and Juniata Valley

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

The idea behind Azul SA and Juniata Valley Financial 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..