Correlation Between Chesapeake Granite and JAN Old

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

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

Diversification Opportunities for Chesapeake Granite and JAN Old

0.0

Correlation Coefficient

Chesapeake Granite  JAN Old

Pay attention - limited upside

The 3 months correlation between Chesapeake and JAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Granite Wash and JAN Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAN Old and Chesapeake Granite 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 Chesapeake Granite Wash 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 Chesapeake Granite i.e., Chesapeake Granite and JAN Old go up and down completely randomly.

Pair Corralation between Chesapeake Granite and JAN Old

If you would invest (100.00) in JAN Old on December 20, 2024 and sell it today you would earn a total of  100.00  from holding JAN Old or generate -100.0% return on investment over 90 days.

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

Chesapeake Granite Wash  vs.  JAN Old

Chesapeake Granite Wash

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chesapeake Granite Wash has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Chesapeake Granite is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail 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 Chesapeake Granite and JAN Old

The main advantage of trading using opposite Chesapeake Granite and JAN Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Granite 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 Chesapeake Granite Wash 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 Global Correlations module to find global opportunities by holding instruments from different markets.