Correlation Between F PD and JX Luxventure

Can any of the company-specific risk be diversified away by investing in both F PD and JX Luxventure 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 F PD and JX Luxventure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between F PD and JX Luxventure Limited, you can compare the effects of market volatilities on F PD and JX Luxventure 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 F PD with a short position of JX Luxventure. Check out your portfolio center. Please also check ongoing floating volatility patterns of F PD and JX Luxventure.

Diversification Opportunities for F PD and JX Luxventure

-0.01

Correlation Coefficient

F PD  JX Luxventure

Good diversification

The 3 months correlation between F-PD and JXG is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding F PD and JX Luxventure Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JX Luxventure Limited and F PD 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 F PD are associated (or correlated) with JX Luxventure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JX Luxventure Limited has no effect on the direction of F PD i.e., F PD and JX Luxventure go up and down completely randomly.

Pair Corralation between F PD and JX Luxventure

Given the investment horizon of 90 days F PD is expected to generate 10.82 times less return on investment than JX Luxventure. But when comparing it to its historical volatility, F PD is 15.32 times less risky than JX Luxventure. It trades about 0.04 of its potential returns per unit of risk. JX Luxventure Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  890.00  in JX Luxventure Limited on October 23, 2024 and sell it today you would lose (613.00) from holding JX Luxventure Limited or give up 68.88% of portfolio value over 90 days.

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

F PD  vs.  JX Luxventure Limited

F PD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days F PD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, F PD is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

JX Luxventure Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JX Luxventure Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, JX Luxventure reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with F PD and JX Luxventure

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

The idea behind F PD and JX Luxventure Limited 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.