Correlation Between Daily Journal and Perception Capital

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

Diversification Opportunities for Daily Journal and Perception Capital

0.0

Correlation Coefficient

Daily Journal  Perception Capital

Pay attention - limited upside

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

Pair Corralation between Daily Journal and Perception Capital

If you would invest (100.00) in Perception Capital Corp on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Perception Capital Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Daily Journal Corp  vs.  Perception Capital Corp

Daily Journal Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Daily Journal Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Perception Capital Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perception Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Perception Capital is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Daily Journal and Perception Capital

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

The idea behind Daily Journal Corp and Perception Capital 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.