Correlation Between Mount Gibson and JCDecaux

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

By analyzing existing cross correlation between Mount Gibson Iron and JCDecaux SA, you can compare the effects of market volatilities on Mount Gibson and JCDecaux 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 Mount Gibson with a short position of JCDecaux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mount Gibson and JCDecaux.

Diversification Opportunities for Mount Gibson and JCDecaux

0.0

Correlation Coefficient

Mount Gibson  JCDecaux

Pay attention - limited upside

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

Pair Corralation between Mount Gibson and JCDecaux

If you would invest  17.00  in Mount Gibson Iron on December 21, 2024 and sell it today you would earn a total of  1.00  from holding Mount Gibson Iron or generate 5.88% return on investment over 90 days.

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

Mount Gibson Iron  vs.  JCDecaux SA

Mount Gibson Iron

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mount Gibson Iron are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mount Gibson reported solid returns over the last few months and may actually be approaching a breakup point.

JCDecaux SA

Risk-Adjusted Performance

OK

Over the last 90 days JCDecaux SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, JCDecaux is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mount Gibson and JCDecaux

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

The idea behind Mount Gibson Iron and JCDecaux SA 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.