Correlation Between Jasmine Telecom and Jay Mart

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

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

Diversification Opportunities for Jasmine Telecom and Jay Mart

0.3

Correlation Coefficient

Jasmine Telecom  Jay Mart

Weak diversification

The 3 months correlation between Jasmine and Jay is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Jasmine Telecom Systems and Jay Mart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jay Mart Public and Jasmine Telecom 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 Jasmine Telecom Systems are associated (or correlated) with Jay Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jay Mart Public has no effect on the direction of Jasmine Telecom i.e., Jasmine Telecom and Jay Mart go up and down completely randomly.

Pair Corralation between Jasmine Telecom and Jay Mart

Assuming the 90 days trading horizon Jasmine Telecom Systems is expected to generate 1.09 times more return on investment than Jay Mart. However, Jasmine Telecom is 1.09 times more volatile than Jay Mart Public. It trades about -0.01 of its potential returns per unit of risk. Jay Mart Public is currently generating about -0.04 per unit of risk. If you would invest  6,775  in Jasmine Telecom Systems on September 3, 2024 and sell it today you would lose (300.00) from holding Jasmine Telecom Systems or give up 4.43% of portfolio value over 90 days.

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

Jasmine Telecom Systems  vs.  Jay Mart Public

Jasmine Telecom Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasmine Telecom Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Jasmine Telecom is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Jay Mart Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jay Mart Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Jay Mart is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jasmine Telecom and Jay Mart

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

The idea behind Jasmine Telecom Systems and Jay Mart 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..