Correlation Between Calavo Growers and Jammin Java

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

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

Diversification Opportunities for Calavo Growers and Jammin Java

-0.03

Correlation Coefficient

Calavo Growers  Jammin Java

Good diversification

The 3 months correlation between Calavo and Jammin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Calavo Growers and Jammin Java Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jammin Java Corp and Calavo Growers 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 Calavo Growers are associated (or correlated) with Jammin Java. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jammin Java Corp has no effect on the direction of Calavo Growers i.e., Calavo Growers and Jammin Java go up and down completely randomly.

Pair Corralation between Calavo Growers and Jammin Java

Given the investment horizon of 90 days Calavo Growers is expected to under-perform the Jammin Java. But the stock apears to be less risky and, when comparing its historical volatility, Calavo Growers is 102.63 times less risky than Jammin Java. The stock trades about -0.01 of its potential returns per unit of risk. The Jammin Java Corp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Jammin Java Corp on December 28, 2024 and sell it today you would earn a total of  0.00  from holding Jammin Java Corp or generate 0.0% return on investment over 90 days.

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

Calavo Growers  vs.  Jammin Java Corp

Calavo Growers

Risk-Adjusted Performance

Very Weak

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

Jammin Java Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jammin Java Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Jammin Java displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calavo Growers and Jammin Java

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

The idea behind Calavo Growers and Jammin Java Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.