Correlation Between JCK Hospitality and Advanced Information

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

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

Diversification Opportunities for JCK Hospitality and Advanced Information

-0.5

Correlation Coefficient

JCK Hospitality  Advanced Information

Very good diversification

The 3 months correlation between JCK and Advanced is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding JCK Hospitality Public and Advanced Information Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Information and JCK Hospitality 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 JCK Hospitality Public are associated (or correlated) with Advanced Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Information has no effect on the direction of JCK Hospitality i.e., JCK Hospitality and Advanced Information go up and down completely randomly.

Pair Corralation between JCK Hospitality and Advanced Information

Assuming the 90 days trading horizon JCK Hospitality Public is expected to generate 150.16 times more return on investment than Advanced Information. However, JCK Hospitality is 150.16 times more volatile than Advanced Information Technology. It trades about 0.25 of its potential returns per unit of risk. Advanced Information Technology is currently generating about -0.24 per unit of risk. If you would invest  2.00  in JCK Hospitality Public on October 11, 2024 and sell it today you would earn a total of  28.00  from holding JCK Hospitality Public or generate 1400.0% return on investment over 90 days.

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

JCK Hospitality Public  vs.  Advanced Information Technolog

JCK Hospitality Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JCK Hospitality Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, JCK Hospitality disclosed solid returns over the last few months and may actually be approaching a breakup point.

Advanced Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Information Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with JCK Hospitality and Advanced Information

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

The idea behind JCK Hospitality Public and Advanced Information Technology 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.