Correlation Between Group 1 and Jowell Global

Can any of the company-specific risk be diversified away by investing in both Group 1 and Jowell Global 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 Group 1 and Jowell Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Group 1 Automotive and Jowell Global, you can compare the effects of market volatilities on Group 1 and Jowell Global 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 Group 1 with a short position of Jowell Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 1 and Jowell Global.

Diversification Opportunities for Group 1 and Jowell Global

0.69

Correlation Coefficient

Group 1  Jowell Global

Poor diversification

The 3 months correlation between Group and Jowell is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Group 1 Automotive and Jowell Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jowell Global and Group 1 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 Group 1 Automotive are associated (or correlated) with Jowell Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jowell Global has no effect on the direction of Group 1 i.e., Group 1 and Jowell Global go up and down completely randomly.

Pair Corralation between Group 1 and Jowell Global

Considering the 90-day investment horizon Group 1 is expected to generate 4.3 times less return on investment than Jowell Global. But when comparing it to its historical volatility, Group 1 Automotive is 5.1 times less risky than Jowell Global. It trades about 0.32 of its potential returns per unit of risk. Jowell Global is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  178.00  in Jowell Global on September 1, 2024 and sell it today you would earn a total of  135.00  from holding Jowell Global or generate 75.84% return on investment over 90 days.

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

Group 1 Automotive  vs.  Jowell Global

Group 1 Automotive

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Group 1 Automotive are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Group 1 demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Jowell Global

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jowell Global are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile technical and fundamental indicators, Jowell Global disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Group 1 and Jowell Global

The main advantage of trading using opposite Group 1 and Jowell Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 1 position performs unexpectedly, Jowell Global 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 Jowell Global will offset losses from the drop in Jowell Global's long position.

The idea behind Group 1 Automotive and Jowell Global 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.