Correlation Between Jammin Java and Colabor

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

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

Diversification Opportunities for Jammin Java and Colabor

0.12

Correlation Coefficient

Jammin Java  Colabor

Average diversification

The 3 months correlation between Jammin and Colabor is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Jammin Java Corp and Colabor Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colabor Group and Jammin Java 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 Jammin Java Corp are associated (or correlated) with Colabor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colabor Group has no effect on the direction of Jammin Java i.e., Jammin Java and Colabor go up and down completely randomly.

Pair Corralation between Jammin Java and Colabor

Given the investment horizon of 90 days Jammin Java Corp is expected to generate 87.65 times more return on investment than Colabor. However, Jammin Java is 87.65 times more volatile than Colabor Group. It trades about 0.24 of its potential returns per unit of risk. Colabor Group is currently generating about 0.01 per unit of risk. If you would invest  0.01  in Jammin Java Corp on December 1, 2024 and sell it today you would earn a total of  0.00  from holding Jammin Java Corp or generate 0.0% return on investment over 90 days.

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

Jammin Java Corp  vs.  Colabor Group

Jammin Java Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jammin Java Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Jammin Java displayed solid returns over the last few months and may actually be approaching a breakup point.

Colabor Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Colabor Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Colabor is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Jammin Java and Colabor

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

The idea behind Jammin Java Corp and Colabor Group 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.