Correlation Between Jay Mart and Major Cineplex

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

Diversification Opportunities for Jay Mart and Major Cineplex

0.33

Correlation Coefficient

Jay Mart  Major Cineplex

Weak diversification

The 3 months correlation between Jay and Major is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and Major Cineplex Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Cineplex Group 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 Major Cineplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Cineplex Group has no effect on the direction of Jay Mart i.e., Jay Mart and Major Cineplex go up and down completely randomly.

Pair Corralation between Jay Mart and Major Cineplex

Assuming the 90 days trading horizon Jay Mart Public is expected to generate 124.6 times more return on investment than Major Cineplex. However, Jay Mart is 124.6 times more volatile than Major Cineplex Group. It trades about 0.12 of its potential returns per unit of risk. Major Cineplex Group is currently generating about -0.14 per unit of risk. If you would invest  1,593  in Jay Mart Public on November 20, 2024 and sell it today you would lose (553.00) from holding Jay Mart Public or give up 34.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	89.83%
Values	Daily Returns

Jay Mart Public  vs.  Major Cineplex Group

Jay Mart Public

Risk-Adjusted Performance

OK

Over the last 90 days Jay Mart Public has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Jay Mart reported solid returns over the last few months and may actually be approaching a breakup point.

Major Cineplex Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Major Cineplex Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Jay Mart and Major Cineplex

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

The idea behind Jay Mart Public and Major Cineplex Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..