Correlation Between JNT and LAMB

Can any of the company-specific risk be diversified away by investing in both JNT and LAMB 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 JNT and LAMB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JNT and LAMB, you can compare the effects of market volatilities on JNT and LAMB 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 JNT with a short position of LAMB. Check out your portfolio center. Please also check ongoing floating volatility patterns of JNT and LAMB.

Diversification Opportunities for JNT and LAMB

0.0

Correlation Coefficient

JNT  LAMB

Pay attention - limited upside

The 3 months correlation between JNT and LAMB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JNT and LAMB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAMB and JNT 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 JNT are associated (or correlated) with LAMB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAMB has no effect on the direction of JNT i.e., JNT and LAMB go up and down completely randomly.

Pair Corralation between JNT and LAMB

If you would invest  0.18  in LAMB on November 19, 2024 and sell it today you would lose (0.04) from holding LAMB or give up 20.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

JNT  vs.  LAMB

JNT

Risk-Adjusted Performance

Very Weak

Over the last 90 days JNT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JNT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

LAMB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LAMB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, LAMB exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JNT and LAMB

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

The idea behind JNT and LAMB 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.