Correlation Between Ford and JNS Holdings

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

By analyzing existing cross correlation between Ford Motor and JNS Holdings Corp, you can compare the effects of market volatilities on Ford and JNS Holdings 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 Ford with a short position of JNS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and JNS Holdings.

Diversification Opportunities for Ford and JNS Holdings

0.29

Correlation Coefficient

Ford  JNS Holdings

Modest diversification

The 3 months correlation between Ford and JNS is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and JNS Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNS Holdings Corp and Ford 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 Ford Motor are associated (or correlated) with JNS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNS Holdings Corp has no effect on the direction of Ford i.e., Ford and JNS Holdings go up and down completely randomly.

Pair Corralation between Ford and JNS Holdings

Taking into account the 90-day investment horizon Ford is expected to generate 8.9 times less return on investment than JNS Holdings. But when comparing it to its historical volatility, Ford Motor is 2.98 times less risky than JNS Holdings. It trades about 0.0 of its potential returns per unit of risk. JNS Holdings Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  0.50  in JNS Holdings Corp on December 2, 2024 and sell it today you would lose (0.27) from holding JNS Holdings Corp or give up 54.0% of portfolio value over 90 days.

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

Ford Motor  vs.  JNS Holdings Corp

Ford Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

JNS Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days JNS Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, JNS Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ford and JNS Holdings

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

The idea behind Ford Motor and JNS Holdings 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.