Correlation Between St Joe and Eco Depot

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Can any of the company-specific risk be diversified away by investing in both St Joe and Eco Depot 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 St Joe and Eco Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Joe Company and Eco Depot, you can compare the effects of market volatilities on St Joe and Eco Depot 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 St Joe with a short position of Eco Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Joe and Eco Depot.

Diversification Opportunities for St Joe and Eco Depot

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between JOE and Eco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding St Joe Company and Eco Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Depot and St Joe 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 St Joe Company are associated (or correlated) with Eco Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Depot has no effect on the direction of St Joe i.e., St Joe and Eco Depot go up and down completely randomly.

Pair Corralation between St Joe and Eco Depot

Considering the 90-day investment horizon St Joe Company is expected to generate 0.06 times more return on investment than Eco Depot. However, St Joe Company is 15.9 times less risky than Eco Depot. It trades about -0.4 of its potential returns per unit of risk. Eco Depot is currently generating about -0.05 per unit of risk. If you would invest  5,233  in St Joe Company on September 12, 2024 and sell it today you would lose (451.00) from holding St Joe Company or give up 8.62% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

St Joe Company  vs.  Eco Depot

 Performance 
       Timeline  
St Joe Company 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days St Joe Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Eco Depot 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Eco Depot has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Eco Depot is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

St Joe and Eco Depot Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with St Joe and Eco Depot

The main advantage of trading using opposite St Joe and Eco Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Joe position performs unexpectedly, Eco Depot 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 Eco Depot will offset losses from the drop in Eco Depot's long position.
The idea behind St Joe Company and Eco Depot 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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