Correlation Between St Joe and Goodman

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

Diversification Opportunities for St Joe and Goodman

0.29

Correlation Coefficient

St Joe  Goodman

Modest diversification

The 3 months correlation between JOE and Goodman is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding St Joe Company and Goodman Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodman Group 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 Goodman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodman Group has no effect on the direction of St Joe i.e., St Joe and Goodman go up and down completely randomly.

Pair Corralation between St Joe and Goodman

Considering the 90-day investment horizon St Joe Company is expected to under-perform the Goodman. But the stock apears to be less risky and, when comparing its historical volatility, St Joe Company is 2.64 times less risky than Goodman. The stock trades about -0.12 of its potential returns per unit of risk. The Goodman Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,477  in Goodman Group on October 26, 2024 and sell it today you would lose (95.00) from holding Goodman Group or give up 3.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

St Joe Company  vs.  Goodman Group

St Joe Company

Risk-Adjusted Performance

0 of 100

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 latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Goodman Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goodman Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Goodman is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with St Joe and Goodman

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

The idea behind St Joe Company and Goodman Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.