Correlation Between Jardine Matheson and Volkswagen

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

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

Diversification Opportunities for Jardine Matheson and Volkswagen

0.0

Correlation Coefficient

Jardine Matheson  Volkswagen

Pay attention - limited upside

The 3 months correlation between Jardine and Volkswagen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jardine Matheson Holdings and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG and Jardine Matheson 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 Jardine Matheson Holdings are associated (or correlated) with Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Jardine Matheson i.e., Jardine Matheson and Volkswagen go up and down completely randomly.

Pair Corralation between Jardine Matheson and Volkswagen

If you would invest  8,320  in Volkswagen AG on September 23, 2024 and sell it today you would earn a total of  748.00  from holding Volkswagen AG or generate 8.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Jardine Matheson Holdings  vs.  Volkswagen AG

Jardine Matheson Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jardine Matheson Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Jardine Matheson is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Volkswagen AG

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Volkswagen AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Volkswagen is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jardine Matheson and Volkswagen

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

The idea behind Jardine Matheson Holdings and Volkswagen AG 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..