Correlation Between JBT Old and Donaldson

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

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

Diversification Opportunities for JBT Old and Donaldson

0.0

Correlation Coefficient

JBT Old  Donaldson

Pay attention - limited upside

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

Pair Corralation between JBT Old and Donaldson

If you would invest  6,702  in Donaldson on December 28, 2024 and sell it today you would earn a total of  173.00  from holding Donaldson or generate 2.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

JBT Old  vs.  Donaldson

JBT Old

Risk-Adjusted Performance

Very Weak

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

Donaldson

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Donaldson are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Donaldson is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with JBT Old and Donaldson

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

The idea behind JBT Old and Donaldson 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.