Correlation Between Jasmine International and Quality Hospitality

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

By analyzing existing cross correlation between Jasmine International Public and Quality Hospitality Leasehold, you can compare the effects of market volatilities on Jasmine International and Quality Hospitality 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 Jasmine International with a short position of Quality Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jasmine International and Quality Hospitality.

Diversification Opportunities for Jasmine International and Quality Hospitality

0.14

Correlation Coefficient

Jasmine International  Quality Hospitality

Average diversification

The 3 months correlation between Jasmine and Quality is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Jasmine International Public and Quality Hospitality Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quality Hospitality and Jasmine International 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 Jasmine International Public are associated (or correlated) with Quality Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quality Hospitality has no effect on the direction of Jasmine International i.e., Jasmine International and Quality Hospitality go up and down completely randomly.

Pair Corralation between Jasmine International and Quality Hospitality

Assuming the 90 days trading horizon Jasmine International is expected to generate 47.76 times less return on investment than Quality Hospitality. But when comparing it to its historical volatility, Jasmine International Public is 11.34 times less risky than Quality Hospitality. It trades about 0.01 of its potential returns per unit of risk. Quality Hospitality Leasehold is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  288.00  in Quality Hospitality Leasehold on October 21, 2024 and sell it today you would earn a total of  52.00  from holding Quality Hospitality Leasehold or generate 18.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Jasmine International Public  vs.  Quality Hospitality Leasehold

Jasmine International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasmine International Public 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 fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Quality Hospitality

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quality Hospitality Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Quality Hospitality is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Jasmine International and Quality Hospitality

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

The idea behind Jasmine International Public and Quality Hospitality Leasehold 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.