Correlation Between Jay Mart and Frasers Property

Can any of the company-specific risk be diversified away by investing in both Jay Mart and Frasers Property 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 Frasers Property 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 Frasers Property Public, you can compare the effects of market volatilities on Jay Mart and Frasers Property 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 Frasers Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jay Mart and Frasers Property.

Diversification Opportunities for Jay Mart and Frasers Property

0.26

Correlation Coefficient

Jay Mart  Frasers Property

Modest diversification

The 3 months correlation between Jay and Frasers is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and Frasers Property Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frasers Property Public 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 Frasers Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frasers Property Public has no effect on the direction of Jay Mart i.e., Jay Mart and Frasers Property go up and down completely randomly.

Pair Corralation between Jay Mart and Frasers Property

Assuming the 90 days trading horizon Jay Mart Public is expected to under-perform the Frasers Property. In addition to that, Jay Mart is 1.98 times more volatile than Frasers Property Public. It trades about -0.15 of its total potential returns per unit of risk. Frasers Property Public is currently generating about -0.2 per unit of volatility. If you would invest  1,279  in Frasers Property Public on September 12, 2024 and sell it today you would lose (109.00) from holding Frasers Property Public or give up 8.52% of portfolio value over 90 days.

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

Jay Mart Public  vs.  Frasers Property Public

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.

Frasers Property Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frasers Property Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Jay Mart and Frasers Property

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

The idea behind Jay Mart Public and Frasers Property Public 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.