Correlation Between Groupon and Jowell Global

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

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

Diversification Opportunities for Groupon and Jowell Global

-0.27

Correlation Coefficient

Groupon  Jowell Global

Very good diversification

The 3 months correlation between Groupon and Jowell is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Groupon and Jowell Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jowell Global and Groupon 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 Groupon 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 Groupon i.e., Groupon and Jowell Global go up and down completely randomly.

Pair Corralation between Groupon and Jowell Global

Given the investment horizon of 90 days Groupon is expected to generate 0.77 times more return on investment than Jowell Global. However, Groupon is 1.3 times less risky than Jowell Global. It trades about 0.08 of its potential returns per unit of risk. Jowell Global is currently generating about 0.0 per unit of risk. If you would invest  955.00  in Groupon on December 1, 2024 and sell it today you would earn a total of  157.00  from holding Groupon or generate 16.44% return on investment over 90 days.

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

Groupon  vs.  Jowell Global

Groupon

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Groupon are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Groupon displayed solid returns over the last few months and may actually be approaching a breakup point.

Jowell Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jowell Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Jowell Global is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Groupon and Jowell Global

The main advantage of trading using opposite Groupon and Jowell Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupon 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 Groupon 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.