Correlation Between JLF INVESTMENT and WideOpenWest

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

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

Diversification Opportunities for JLF INVESTMENT and WideOpenWest

0.0

Correlation Coefficient

JLF INVESTMENT  WideOpenWest

Pay attention - limited upside

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

Pair Corralation between JLF INVESTMENT and WideOpenWest

Assuming the 90 days trading horizon JLF INVESTMENT is expected to under-perform the WideOpenWest. But the stock apears to be less risky and, when comparing its historical volatility, JLF INVESTMENT is 1.98 times less risky than WideOpenWest. The stock trades about -0.04 of its potential returns per unit of risk. The WideOpenWest is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  975.00  in WideOpenWest on October 7, 2024 and sell it today you would lose (515.00) from holding WideOpenWest or give up 52.82% of portfolio value over 90 days.

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

JLF INVESTMENT  vs.  WideOpenWest

JLF INVESTMENT

Risk-Adjusted Performance

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Very Weak

Over the last 90 days JLF INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JLF INVESTMENT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

WideOpenWest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WideOpenWest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WideOpenWest is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JLF INVESTMENT and WideOpenWest

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

The idea behind JLF INVESTMENT and WideOpenWest 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.