Correlation Between Jay Mart and E For

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

By analyzing existing cross correlation between Jay Mart Public and E for L, you can compare the effects of market volatilities on Jay Mart and E For 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 Jay Mart with a short position of E For. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jay Mart and E For.

Diversification Opportunities for Jay Mart and E For

-0.07

Correlation Coefficient

Jay Mart  E For

Good diversification

The 3 months correlation between Jay and EFORL is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and E for L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E for L and Jay Mart 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 Jay Mart Public are associated (or correlated) with E For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E for L has no effect on the direction of Jay Mart i.e., Jay Mart and E For go up and down completely randomly.

Pair Corralation between Jay Mart and E For

Assuming the 90 days trading horizon Jay Mart Public is expected to generate 19.95 times more return on investment than E For. However, Jay Mart is 19.95 times more volatile than E for L. It trades about 0.11 of its potential returns per unit of risk. E for L is currently generating about 0.25 per unit of risk. If you would invest  1,593  in Jay Mart Public on September 12, 2024 and sell it today you would lose (213.00) from holding Jay Mart Public or give up 13.37% of portfolio value over 90 days.

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

Jay Mart Public  vs.  E for L

Jay Mart Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jay Mart Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Jay Mart reported solid returns over the last few months and may actually be approaching a breakup point.

E for L

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in E for L are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, E For sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jay Mart and E For

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

The idea behind Jay Mart Public and E for L 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.