Correlation Between Jutal Offshore and GENERAL

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

Diversification Opportunities for Jutal Offshore and GENERAL

0.13

Correlation Coefficient

Jutal Offshore  GENERAL

Average diversification

The 3 months correlation between Jutal and GENERAL is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Jutal Offshore Oil and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of Jutal Offshore i.e., Jutal Offshore and GENERAL go up and down completely randomly.

Pair Corralation between Jutal Offshore and GENERAL

If you would invest  10,964  in GENERAL ELEC CAP on December 23, 2024 and sell it today you would earn a total of  147.00  from holding GENERAL ELEC CAP or generate 1.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Jutal Offshore Oil  vs.  GENERAL ELEC CAP

Jutal Offshore Oil

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jutal Offshore Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Jutal Offshore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GENERAL ELEC CAP

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GENERAL ELEC CAP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, GENERAL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jutal Offshore and GENERAL

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

The idea behind Jutal Offshore Oil and GENERAL ELEC CAP 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.