Correlation Between DMCC SPECIALITY and Juniper Hotels

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

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

Diversification Opportunities for DMCC SPECIALITY and Juniper Hotels

0.71

Correlation Coefficient

DMCC SPECIALITY  Juniper Hotels

Poor diversification

The 3 months correlation between DMCC and Juniper is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding DMCC SPECIALITY CHEMICALS and Juniper Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Hotels and DMCC SPECIALITY 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 DMCC SPECIALITY CHEMICALS are associated (or correlated) with Juniper Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper Hotels has no effect on the direction of DMCC SPECIALITY i.e., DMCC SPECIALITY and Juniper Hotels go up and down completely randomly.

Pair Corralation between DMCC SPECIALITY and Juniper Hotels

Assuming the 90 days trading horizon DMCC SPECIALITY CHEMICALS is expected to generate 0.85 times more return on investment than Juniper Hotels. However, DMCC SPECIALITY CHEMICALS is 1.18 times less risky than Juniper Hotels. It trades about -0.11 of its potential returns per unit of risk. Juniper Hotels is currently generating about -0.13 per unit of risk. If you would invest  36,340  in DMCC SPECIALITY CHEMICALS on December 29, 2024 and sell it today you would lose (6,935) from holding DMCC SPECIALITY CHEMICALS or give up 19.08% of portfolio value over 90 days.

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

DMCC SPECIALITY CHEMICALS  vs.  Juniper Hotels

DMCC SPECIALITY CHEMICALS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DMCC SPECIALITY CHEMICALS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Juniper Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Juniper Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with DMCC SPECIALITY and Juniper Hotels

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

The idea behind DMCC SPECIALITY CHEMICALS and Juniper Hotels 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.