Correlation Between Jay Mart and RS Public

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

Diversification Opportunities for Jay Mart and RS Public

0.01

Correlation Coefficient

Jay Mart  RS Public

Significant diversification

The 3 months correlation between Jay and RS-R is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and RS Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RS 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 RS Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RS Public has no effect on the direction of Jay Mart i.e., Jay Mart and RS Public go up and down completely randomly.

Pair Corralation between Jay Mart and RS Public

Assuming the 90 days trading horizon Jay Mart is expected to generate 1.01 times less return on investment than RS Public. In addition to that, Jay Mart is 1.0 times more volatile than RS Public. It trades about 0.16 of its total potential returns per unit of risk. RS Public is currently generating about 0.16 per unit of volatility. If you would invest  720.00  in RS Public on August 31, 2024 and sell it today you would lose (145.00) from holding RS Public or give up 20.14% of portfolio value over 90 days.

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

Jay Mart Public  vs.  RS Public

Jay Mart Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jay Mart Public are ranked lower than 12 (%) 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.

RS Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RS Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, RS Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jay Mart and RS Public

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

The idea behind Jay Mart Public and RS 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.