Correlation Between JPX Global and Avalon Holdings

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

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

Diversification Opportunities for JPX Global and Avalon Holdings

-0.48

Correlation Coefficient

JPX Global  Avalon Holdings

Very good diversification

The 3 months correlation between JPX and Avalon is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding JPX Global and Avalon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalon Holdings and JPX Global 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 JPX Global are associated (or correlated) with Avalon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalon Holdings has no effect on the direction of JPX Global i.e., JPX Global and Avalon Holdings go up and down completely randomly.

Pair Corralation between JPX Global and Avalon Holdings

If you would invest  325.00  in Avalon Holdings on October 8, 2024 and sell it today you would earn a total of  47.00  from holding Avalon Holdings or generate 14.46% return on investment over 90 days.

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

JPX Global  vs.  Avalon Holdings

JPX Global

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPX Global are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, JPX Global showed solid returns over the last few months and may actually be approaching a breakup point.

Avalon Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Avalon Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Avalon Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPX Global and Avalon Holdings

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

The idea behind JPX Global and Avalon Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.