Correlation Between Jasmine International and International Research

Can any of the company-specific risk be diversified away by investing in both Jasmine International and International Research 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 International Research 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 International Research, you can compare the effects of market volatilities on Jasmine International and International Research 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 International Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jasmine International and International Research.

Diversification Opportunities for Jasmine International and International Research

0.26

Correlation Coefficient

Jasmine International  International Research

Modest diversification

The 3 months correlation between Jasmine and International is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jasmine International Public and International Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Research 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 International Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Research has no effect on the direction of Jasmine International i.e., Jasmine International and International Research go up and down completely randomly.

Pair Corralation between Jasmine International and International Research

Assuming the 90 days trading horizon Jasmine International Public is expected to under-perform the International Research. But the stock apears to be less risky and, when comparing its historical volatility, Jasmine International Public is 40.3 times less risky than International Research. The stock trades about -0.03 of its potential returns per unit of risk. The International Research is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.00  in International Research on September 3, 2024 and sell it today you would earn a total of  50.00  from holding International Research or generate 9.223372036854776E16% return on investment over 90 days.

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

Jasmine International Public  vs.  International Research

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 quite persistent basic indicators, Jasmine International is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

International Research

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in International Research are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, International Research disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jasmine International and International Research

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

The idea behind Jasmine International Public and International Research 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.