Correlation Between CNJ Capital and Medical Facilities

Can any of the company-specific risk be diversified away by investing in both CNJ Capital and Medical Facilities 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 Medical Facilities 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 Medical Facilities, you can compare the effects of market volatilities on CNJ Capital and Medical Facilities 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 Medical Facilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNJ Capital and Medical Facilities.

Diversification Opportunities for CNJ Capital and Medical Facilities

0.0

Correlation Coefficient

CNJ Capital  Medical Facilities

Pay attention - limited upside

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

Pair Corralation between CNJ Capital and Medical Facilities

If you would invest  1,530  in Medical Facilities on December 29, 2024 and sell it today you would earn a total of  67.00  from holding Medical Facilities or generate 4.38% return on investment over 90 days.

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

CNJ Capital Investments  vs.  Medical Facilities

CNJ Capital Investments

Risk-Adjusted Performance

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 recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Medical Facilities

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Medical Facilities are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Medical Facilities is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CNJ Capital and Medical Facilities

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

The idea behind CNJ Capital Investments and Medical Facilities 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.