Correlation Between JGC Corp and Badger Infrastructure

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

By analyzing existing cross correlation between JGC Corp and Badger Infrastructure Solutions, you can compare the effects of market volatilities on JGC Corp and Badger Infrastructure 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 Badger Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of JGC Corp and Badger Infrastructure.

Diversification Opportunities for JGC Corp and Badger Infrastructure

0.43

Correlation Coefficient

JGC Corp  Badger Infrastructure

Very weak diversification

The 3 months correlation between JGC and Badger is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding JGC Corp and Badger Infrastructure Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Infrastructure 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 Badger Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Infrastructure has no effect on the direction of JGC Corp i.e., JGC Corp and Badger Infrastructure go up and down completely randomly.

Pair Corralation between JGC Corp and Badger Infrastructure

Assuming the 90 days horizon JGC Corp is expected to under-perform the Badger Infrastructure. But the pink sheet apears to be less risky and, when comparing its historical volatility, JGC Corp is 1.21 times less risky than Badger Infrastructure. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Badger Infrastructure Solutions is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,715  in Badger Infrastructure Solutions on September 2, 2024 and sell it today you would earn a total of  38.00  from holding Badger Infrastructure Solutions or generate 1.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

JGC Corp  vs.  Badger Infrastructure Solution

JGC Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JGC Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, JGC Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Badger Infrastructure

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Badger Infrastructure Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Badger Infrastructure is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JGC Corp and Badger Infrastructure

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

The idea behind JGC Corp and Badger Infrastructure Solutions 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.