Correlation Between Jay Mart and Sherwood Public

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

Diversification Opportunities for Jay Mart and Sherwood Public

JaySherwoodDiversified AwayJaySherwoodDiversified Away100%
0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Jay and Sherwood is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jay Mart Public and Sherwood Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwood 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 Sherwood Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherwood Public has no effect on the direction of Jay Mart i.e., Jay Mart and Sherwood Public go up and down completely randomly.

Pair Corralation between Jay Mart and Sherwood Public

Assuming the 90 days trading horizon Jay Mart Public is expected to under-perform the Sherwood Public. But the stock apears to be less risky and, when comparing its historical volatility, Jay Mart Public is 1.0 times less risky than Sherwood Public. The stock trades about -0.14 of its potential returns per unit of risk. The Sherwood Public is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  310.00  in Sherwood Public on November 24, 2024 and sell it today you would lose (42.00) from holding Sherwood Public or give up 13.55% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.36%
ValuesDaily Returns

Jay Mart Public  vs.  Sherwood Public

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-505
JavaScript chart by amCharts 3.21.15JMART SWC
       Timeline  
Jay Mart Public 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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 March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1011121314
Sherwood Public 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Sherwood 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 March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2.62.72.82.933.1

Jay Mart and Sherwood Public Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.46-3.34-2.22-1.1-0.01620.941.922.893.874.84 0.0450.0500.055
JavaScript chart by amCharts 3.21.15JMART SWC
       Returns  

Pair Trading with Jay Mart and Sherwood Public

The main advantage of trading using opposite Jay Mart and Sherwood Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jay Mart position performs unexpectedly, Sherwood 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 Sherwood Public will offset losses from the drop in Sherwood Public's long position.
The idea behind Jay Mart Public and Sherwood 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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