Correlation Between Jutal Offshore and Montana Technologies

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

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

Diversification Opportunities for Jutal Offshore and Montana Technologies

0.46

Correlation Coefficient

Jutal Offshore  Montana Technologies

Very weak diversification

The 3 months correlation between Jutal and Montana is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jutal Offshore Oil and Montana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montana Technologies and Jutal Offshore 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 Jutal Offshore Oil are associated (or correlated) with Montana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montana Technologies has no effect on the direction of Jutal Offshore i.e., Jutal Offshore and Montana Technologies go up and down completely randomly.

Pair Corralation between Jutal Offshore and Montana Technologies

Assuming the 90 days horizon Jutal Offshore Oil is expected to generate 0.52 times more return on investment than Montana Technologies. However, Jutal Offshore Oil is 1.94 times less risky than Montana Technologies. It trades about 0.01 of its potential returns per unit of risk. Montana Technologies is currently generating about -0.04 per unit of risk. If you would invest  2,332  in Jutal Offshore Oil on October 24, 2024 and sell it today you would lose (251.00) from holding Jutal Offshore Oil or give up 10.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	55.33%
Values	Daily Returns

Jutal Offshore Oil  vs.  Montana Technologies

Jutal Offshore Oil

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Jutal Offshore may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Montana Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Montana Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Montana Technologies revealed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jutal Offshore and Montana Technologies

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

The idea behind Jutal Offshore Oil and Montana Technologies 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.