Correlation Between Jay Mart and MFEC PCL

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

Diversification Opportunities for Jay Mart and MFEC PCL

-0.24

Correlation Coefficient

Jay Mart  MFEC PCL

Very good diversification

The 3 months correlation between Jay and MFEC is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and MFEC PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFEC PCL 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 MFEC PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFEC PCL has no effect on the direction of Jay Mart i.e., Jay Mart and MFEC PCL go up and down completely randomly.

Pair Corralation between Jay Mart and MFEC PCL

Assuming the 90 days trading horizon Jay Mart Public is expected to under-perform the MFEC PCL. But the stock apears to be less risky and, when comparing its historical volatility, Jay Mart Public is 11.52 times less risky than MFEC PCL. The stock trades about -0.04 of its potential returns per unit of risk. The MFEC PCL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  704.00  in MFEC PCL on September 25, 2024 and sell it today you would lose (114.00) from holding MFEC PCL or give up 16.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Jay Mart Public  vs.  MFEC PCL

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.

MFEC PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MFEC PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, MFEC PCL 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 MFEC PCL

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

The idea behind Jay Mart Public and MFEC PCL 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.