Correlation Between IDJ FINANCIAL and Post

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

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

Diversification Opportunities for IDJ FINANCIAL and Post

-0.27

Correlation Coefficient

IDJ FINANCIAL  Post

Very good diversification

The 3 months correlation between IDJ and Post is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding IDJ FINANCIAL and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni and IDJ FINANCIAL 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 IDJ FINANCIAL are associated (or correlated) with Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of IDJ FINANCIAL i.e., IDJ FINANCIAL and Post go up and down completely randomly.

Pair Corralation between IDJ FINANCIAL and Post

Assuming the 90 days trading horizon IDJ FINANCIAL is expected to under-perform the Post. But the stock apears to be less risky and, when comparing its historical volatility, IDJ FINANCIAL is 1.9 times less risky than Post. The stock trades about -0.13 of its potential returns per unit of risk. The Post and Telecommunications is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  458,000  in Post and Telecommunications on December 19, 2024 and sell it today you would earn a total of  105,000  from holding Post and Telecommunications or generate 22.93% return on investment over 90 days.

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

IDJ FINANCIAL  vs.  Post and Telecommunications

IDJ FINANCIAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days IDJ FINANCIAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward-looking indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Post and Telecommuni

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Post and Telecommunications are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Post displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IDJ FINANCIAL and Post

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

The idea behind IDJ FINANCIAL and Post and Telecommunications 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.