Correlation Between Jay Mart and Jasmine Telecom

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

Diversification Opportunities for Jay Mart and Jasmine Telecom

0.3

Correlation Coefficient

Jay Mart  Jasmine Telecom

Weak diversification

The 3 months correlation between Jay and Jasmine is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and Jasmine Telecom Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasmine Telecom Systems 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 Jasmine Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasmine Telecom Systems has no effect on the direction of Jay Mart i.e., Jay Mart and Jasmine Telecom go up and down completely randomly.

Pair Corralation between Jay Mart and Jasmine Telecom

Assuming the 90 days trading horizon Jay Mart Public is expected to under-perform the Jasmine Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Jay Mart Public is 1.09 times less risky than Jasmine Telecom. The stock trades about -0.04 of its potential returns per unit of risk. The Jasmine Telecom Systems is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  6,775  in Jasmine Telecom Systems on September 3, 2024 and sell it today you would lose (300.00) from holding Jasmine Telecom Systems or give up 4.43% 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.  Jasmine Telecom Systems

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 somewhat strong fundamental drivers, Jay Mart is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Jasmine Telecom Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasmine Telecom Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Jasmine Telecom is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Jay Mart and Jasmine Telecom

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

The idea behind Jay Mart Public and Jasmine Telecom Systems 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.