Correlation Between Juniata Valley and Dennys Corp

Can any of the company-specific risk be diversified away by investing in both Juniata Valley and Dennys Corp 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 Juniata Valley and Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Juniata Valley Financial and Dennys Corp, you can compare the effects of market volatilities on Juniata Valley and Dennys Corp 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 Juniata Valley with a short position of Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniata Valley and Dennys Corp.

Diversification Opportunities for Juniata Valley and Dennys Corp

-0.28

Correlation Coefficient

Juniata Valley  Dennys Corp

Very good diversification

The 3 months correlation between Juniata and Dennys is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp and Juniata Valley 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 Juniata Valley Financial are associated (or correlated) with Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of Juniata Valley i.e., Juniata Valley and Dennys Corp go up and down completely randomly.

Pair Corralation between Juniata Valley and Dennys Corp

Given the investment horizon of 90 days Juniata Valley Financial is expected to under-perform the Dennys Corp. But the otc stock apears to be less risky and, when comparing its historical volatility, Juniata Valley Financial is 1.82 times less risky than Dennys Corp. The otc stock trades about -0.08 of its potential returns per unit of risk. The Dennys Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  587.00  in Dennys Corp on October 25, 2024 and sell it today you would earn a total of  56.00  from holding Dennys Corp or generate 9.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Juniata Valley Financial  vs.  Dennys Corp

Juniata Valley Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Juniata Valley may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Dennys Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dennys Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Dennys Corp is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Juniata Valley and Dennys Corp

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

The idea behind Juniata Valley Financial and Dennys Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.