Correlation Between Jutal Offshore and SIMON

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

Diversification Opportunities for Jutal Offshore and SIMON

-0.03

Correlation Coefficient

Jutal Offshore  SIMON

Good diversification

The 3 months correlation between Jutal and SIMON is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jutal Offshore Oil and SIMON PPTY GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMON PPTY GROUP 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 SIMON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMON PPTY GROUP has no effect on the direction of Jutal Offshore i.e., Jutal Offshore and SIMON go up and down completely randomly.

Pair Corralation between Jutal Offshore and SIMON

Assuming the 90 days horizon Jutal Offshore Oil is expected to generate 2.0 times more return on investment than SIMON. However, Jutal Offshore is 2.0 times more volatile than SIMON PPTY GROUP. It trades about 0.11 of its potential returns per unit of risk. SIMON PPTY GROUP is currently generating about 0.04 per unit of risk. If you would invest  1,624  in Jutal Offshore Oil on September 16, 2024 and sell it today you would earn a total of  281.00  from holding Jutal Offshore Oil or generate 17.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.76%
Values	Daily Returns

Jutal Offshore Oil  vs.  SIMON PPTY GROUP

Jutal Offshore Oil

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Jutal Offshore showed solid returns over the last few months and may actually be approaching a breakup point.

SIMON PPTY GROUP

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Jutal Offshore and SIMON

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

The idea behind Jutal Offshore Oil and SIMON PPTY GROUP 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.