Correlation Between Jaguar Animal and Palisade Bio

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

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

Diversification Opportunities for Jaguar Animal and Palisade Bio

0.65

Correlation Coefficient

Jaguar Animal  Palisade Bio

Poor diversification

The 3 months correlation between Jaguar and Palisade is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Jaguar Animal Health and Palisade Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palisade Bio and Jaguar Animal 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 Jaguar Animal Health are associated (or correlated) with Palisade Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palisade Bio has no effect on the direction of Jaguar Animal i.e., Jaguar Animal and Palisade Bio go up and down completely randomly.

Pair Corralation between Jaguar Animal and Palisade Bio

Given the investment horizon of 90 days Jaguar Animal Health is expected to under-perform the Palisade Bio. But the stock apears to be less risky and, when comparing its historical volatility, Jaguar Animal Health is 1.04 times less risky than Palisade Bio. The stock trades about -0.05 of its potential returns per unit of risk. The Palisade Bio is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  3,195  in Palisade Bio on December 2, 2024 and sell it today you would lose (3,112) from holding Palisade Bio or give up 97.4% of portfolio value over 90 days.

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

Jaguar Animal Health  vs.  Palisade Bio

Jaguar Animal Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jaguar Animal Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Palisade Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Palisade Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Jaguar Animal and Palisade Bio

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

The idea behind Jaguar Animal Health and Palisade Bio 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.