Correlation Between European Wax and Jutal Offshore

Can any of the company-specific risk be diversified away by investing in both European Wax and Jutal Offshore 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 European Wax and Jutal Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between European Wax Center and Jutal Offshore Oil, you can compare the effects of market volatilities on European Wax and Jutal Offshore 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 European Wax with a short position of Jutal Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Wax and Jutal Offshore.

Diversification Opportunities for European Wax and Jutal Offshore

-0.35

Correlation Coefficient

European Wax  Jutal Offshore

Very good diversification

The 3 months correlation between European and Jutal is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding European Wax Center and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil and European Wax 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 European Wax Center are associated (or correlated) with Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of European Wax i.e., European Wax and Jutal Offshore go up and down completely randomly.

Pair Corralation between European Wax and Jutal Offshore

Given the investment horizon of 90 days European Wax Center is expected to under-perform the Jutal Offshore. In addition to that, European Wax is 1.08 times more volatile than Jutal Offshore Oil. It trades about -0.04 of its total potential returns per unit of risk. Jutal Offshore Oil is currently generating about 0.01 per unit of volatility. If you would invest  2,332  in Jutal Offshore Oil on October 15, 2024 and sell it today you would lose (251.00) from holding Jutal Offshore Oil or give up 10.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

European Wax Center  vs.  Jutal Offshore Oil

European Wax Center

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days European Wax Center has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, European Wax is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Jutal Offshore Oil

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Jutal Offshore may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with European Wax and Jutal Offshore

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

The idea behind European Wax Center and Jutal Offshore Oil 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.