Correlation Between Jay Mart and Filter Vision

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

Diversification Opportunities for Jay Mart and Filter Vision

0.82

Correlation Coefficient

Jay Mart  Filter Vision

Very poor diversification

The 3 months correlation between Jay and Filter is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and Filter Vision Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filter Vision 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 Filter Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filter Vision Public has no effect on the direction of Jay Mart i.e., Jay Mart and Filter Vision go up and down completely randomly.

Pair Corralation between Jay Mart and Filter Vision

Assuming the 90 days trading horizon Jay Mart Public is expected to generate 0.67 times more return on investment than Filter Vision. However, Jay Mart Public is 1.5 times less risky than Filter Vision. It trades about 0.01 of its potential returns per unit of risk. Filter Vision Public is currently generating about -0.09 per unit of risk. If you would invest  1,360  in Jay Mart Public on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Jay Mart Public or generate 0.0% return on investment over 90 days.

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

Jay Mart Public  vs.  Filter Vision Public

Jay Mart Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jay Mart Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Filter Vision Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Filter Vision Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Jay Mart and Filter Vision

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

The idea behind Jay Mart Public and Filter Vision 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.