Correlation Between Daily Journal and GABY

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

Diversification Opportunities for Daily Journal and GABY

0.0

Correlation Coefficient

Daily Journal  GABY

Pay attention - limited upside

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

Pair Corralation between Daily Journal and GABY

If you would invest  46,500  in Daily Journal Corp on October 5, 2024 and sell it today you would earn a total of  9,240  from holding Daily Journal Corp or generate 19.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Daily Journal Corp  vs.  GABY Inc

Daily Journal Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Daily Journal Corp are ranked lower than 9 (%) 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.

GABY Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Daily Journal and GABY

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

The idea behind Daily Journal Corp and GABY Inc 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.