Correlation Between J J and Ispire Technology

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

By analyzing existing cross correlation between J J Snack and Ispire Technology Common, you can compare the effects of market volatilities on J J and Ispire Technology 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 J J with a short position of Ispire Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of J J and Ispire Technology.

Diversification Opportunities for J J and Ispire Technology

0.12

Correlation Coefficient

J J  Ispire Technology

Average diversification

The 3 months correlation between JJSF and Ispire is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and Ispire Technology Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ispire Technology Common and J J 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 J J Snack are associated (or correlated) with Ispire Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ispire Technology Common has no effect on the direction of J J i.e., J J and Ispire Technology go up and down completely randomly.

Pair Corralation between J J and Ispire Technology

Given the investment horizon of 90 days J J Snack is expected to under-perform the Ispire Technology. But the stock apears to be less risky and, when comparing its historical volatility, J J Snack is 3.88 times less risky than Ispire Technology. The stock trades about -0.43 of its potential returns per unit of risk. The Ispire Technology Common is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  626.00  in Ispire Technology Common on September 25, 2024 and sell it today you would lose (50.00) from holding Ispire Technology Common or give up 7.99% of portfolio value over 90 days.

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

J J Snack  vs.  Ispire Technology Common

J J Snack

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days J J Snack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, J J is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Ispire Technology Common

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ispire Technology Common are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Ispire Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with J J and Ispire Technology

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

The idea behind J J Snack and Ispire Technology Common 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.