Correlation Between JFL Living and Domo Fundo

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

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

Diversification Opportunities for JFL Living and Domo Fundo

-0.09

Correlation Coefficient

JFL Living  Domo Fundo

Good diversification

The 3 months correlation between JFL and Domo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding JFL Living Fundo and Domo Fundo de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Domo Fundo de and JFL Living 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 JFL Living Fundo are associated (or correlated) with Domo Fundo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Domo Fundo de has no effect on the direction of JFL Living i.e., JFL Living and Domo Fundo go up and down completely randomly.

Pair Corralation between JFL Living and Domo Fundo

Assuming the 90 days trading horizon JFL Living Fundo is expected to generate 1.3 times more return on investment than Domo Fundo. However, JFL Living is 1.3 times more volatile than Domo Fundo de. It trades about 0.04 of its potential returns per unit of risk. Domo Fundo de is currently generating about 0.03 per unit of risk. If you would invest  7,046  in JFL Living Fundo on September 14, 2024 and sell it today you would earn a total of  154.00  from holding JFL Living Fundo or generate 2.19% return on investment over 90 days.

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

JFL Living Fundo  vs.  Domo Fundo de

JFL Living Fundo

Risk-Adjusted Performance

3 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JFL Living Fundo are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong essential indicators, JFL Living is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Domo Fundo de

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Domo Fundo de are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Domo Fundo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JFL Living and Domo Fundo

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

The idea behind JFL Living Fundo and Domo Fundo de 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.