Correlation Between Judo Capital and Iodm

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

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

Diversification Opportunities for Judo Capital and Iodm

-0.15

Correlation Coefficient

Judo Capital  Iodm

Good diversification

The 3 months correlation between Judo and Iodm is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Judo Capital Holdings and Iodm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iodm and Judo Capital 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 Judo Capital Holdings are associated (or correlated) with Iodm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iodm has no effect on the direction of Judo Capital i.e., Judo Capital and Iodm go up and down completely randomly.

Pair Corralation between Judo Capital and Iodm

Assuming the 90 days trading horizon Judo Capital Holdings is expected to generate 0.32 times more return on investment than Iodm. However, Judo Capital Holdings is 3.1 times less risky than Iodm. It trades about 0.25 of its potential returns per unit of risk. Iodm is currently generating about -0.18 per unit of risk. If you would invest  188.00  in Judo Capital Holdings on September 5, 2024 and sell it today you would earn a total of  14.00  from holding Judo Capital Holdings or generate 7.45% return on investment over 90 days.

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

Judo Capital Holdings  vs.  Iodm

Judo Capital Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Judo Capital Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Judo Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Iodm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iodm has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Judo Capital and Iodm

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

The idea behind Judo Capital Holdings and Iodm 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.