Correlation Between CNJ Capital and DelphX Capital

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

By analyzing existing cross correlation between CNJ Capital Investments and DelphX Capital Markets, you can compare the effects of market volatilities on CNJ Capital and DelphX Capital 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 CNJ Capital with a short position of DelphX Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNJ Capital and DelphX Capital.

Diversification Opportunities for CNJ Capital and DelphX Capital

0.0

Correlation Coefficient

CNJ Capital  DelphX Capital

Pay attention - limited upside

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

Pair Corralation between CNJ Capital and DelphX Capital

Assuming the 90 days trading horizon CNJ Capital is expected to generate 5.4 times less return on investment than DelphX Capital. But when comparing it to its historical volatility, CNJ Capital Investments is 1.77 times less risky than DelphX Capital. It trades about 0.01 of its potential returns per unit of risk. DelphX Capital Markets is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  17.00  in DelphX Capital Markets on October 5, 2024 and sell it today you would lose (3.00) from holding DelphX Capital Markets or give up 17.65% of portfolio value over 90 days.

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

CNJ Capital Investments  vs.  DelphX Capital Markets

CNJ Capital Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CNJ Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CNJ Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

DelphX Capital Markets

Risk-Adjusted Performance

7 of 100

Insignificant

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

Pair Trading with CNJ Capital and DelphX Capital

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

The idea behind CNJ Capital Investments and DelphX Capital Markets 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.