Correlation Between Daily Journal and CCC Intelligent

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

By analyzing existing cross correlation between Daily Journal Corp and CCC Intelligent Solutions, you can compare the effects of market volatilities on Daily Journal and CCC Intelligent 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 Daily Journal with a short position of CCC Intelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daily Journal and CCC Intelligent.

Diversification Opportunities for Daily Journal and CCC Intelligent

0.87

Correlation Coefficient

Daily Journal  CCC Intelligent

Very poor diversification

The 3 months correlation between Daily and CCC is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Daily Journal Corp and CCC Intelligent Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCC Intelligent Solutions and Daily Journal 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 Daily Journal Corp are associated (or correlated) with CCC Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCC Intelligent Solutions has no effect on the direction of Daily Journal i.e., Daily Journal and CCC Intelligent go up and down completely randomly.

Pair Corralation between Daily Journal and CCC Intelligent

Given the investment horizon of 90 days Daily Journal Corp is expected to generate 1.48 times more return on investment than CCC Intelligent. However, Daily Journal is 1.48 times more volatile than CCC Intelligent Solutions. It trades about 0.1 of its potential returns per unit of risk. CCC Intelligent Solutions is currently generating about 0.04 per unit of risk. If you would invest  30,152  in Daily Journal Corp on September 12, 2024 and sell it today you would earn a total of  27,899  from holding Daily Journal Corp or generate 92.53% return on investment over 90 days.

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

Daily Journal Corp  vs.  CCC Intelligent Solutions

Daily Journal Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Daily Journal Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Daily Journal displayed solid returns over the last few months and may actually be approaching a breakup point.

CCC Intelligent Solutions

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CCC Intelligent Solutions are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, CCC Intelligent unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Daily Journal and CCC Intelligent

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

The idea behind Daily Journal Corp and CCC Intelligent Solutions 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.