Correlation Between JGC Corp and Acciona SA

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

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

Diversification Opportunities for JGC Corp and Acciona SA

-0.24

Correlation Coefficient

JGC Corp  Acciona SA

Very good diversification

The 3 months correlation between JGC and Acciona is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding JGC Corp and Acciona SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acciona SA and JGC Corp 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 JGC Corp are associated (or correlated) with Acciona SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acciona SA has no effect on the direction of JGC Corp i.e., JGC Corp and Acciona SA go up and down completely randomly.

Pair Corralation between JGC Corp and Acciona SA

Assuming the 90 days horizon JGC Corp is expected to generate 2.36 times less return on investment than Acciona SA. In addition to that, JGC Corp is 1.85 times more volatile than Acciona SA. It trades about 0.03 of its total potential returns per unit of risk. Acciona SA is currently generating about 0.11 per unit of volatility. If you would invest  10,865  in Acciona SA on December 28, 2024 and sell it today you would earn a total of  1,779  from holding Acciona SA or generate 16.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.8%
Values	Daily Returns

JGC Corp  vs.  Acciona SA

JGC Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JGC Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, JGC Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Acciona SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Acciona SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal forward indicators, Acciona SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JGC Corp and Acciona SA

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

The idea behind JGC Corp and Acciona SA 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.