Correlation Between Jutal Offshore and Ambari Brands

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

Diversification Opportunities for Jutal Offshore and Ambari Brands

-0.22

Correlation Coefficient

Jutal Offshore  Ambari Brands

Very good diversification

The 3 months correlation between Jutal and Ambari is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Jutal Offshore Oil and Ambari Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambari Brands 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 Ambari Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambari Brands has no effect on the direction of Jutal Offshore i.e., Jutal Offshore and Ambari Brands go up and down completely randomly.

Pair Corralation between Jutal Offshore and Ambari Brands

Assuming the 90 days horizon Jutal Offshore is expected to generate 12.53 times less return on investment than Ambari Brands. But when comparing it to its historical volatility, Jutal Offshore Oil is 3.07 times less risky than Ambari Brands. It trades about 0.12 of its potential returns per unit of risk. Ambari Brands is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Ambari Brands on October 23, 2024 and sell it today you would earn a total of  0.50  from holding Ambari Brands or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	6.35%
Values	Daily Returns

Jutal Offshore Oil  vs.  Ambari Brands

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 unsteady basic indicators, Jutal Offshore may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ambari Brands

Risk-Adjusted Performance

0 of 100

Very Strong

Over the last 90 days Ambari Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unfluctuating fundamental drivers, Ambari Brands reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jutal Offshore and Ambari Brands

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

The idea behind Jutal Offshore Oil and Ambari Brands 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.