Correlation Between Juniata Valley and Mach Natural

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

Diversification Opportunities for Juniata Valley and Mach Natural

0.17

Correlation Coefficient

Juniata Valley  Mach Natural

Average diversification

The 3 months correlation between Juniata and Mach is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and Mach Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mach Natural Resources 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 Mach Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mach Natural Resources has no effect on the direction of Juniata Valley i.e., Juniata Valley and Mach Natural go up and down completely randomly.

Pair Corralation between Juniata Valley and Mach Natural

Given the investment horizon of 90 days Juniata Valley Financial is expected to generate 1.36 times more return on investment than Mach Natural. However, Juniata Valley is 1.36 times more volatile than Mach Natural Resources. It trades about 0.04 of its potential returns per unit of risk. Mach Natural Resources is currently generating about -0.14 per unit of risk. If you would invest  1,293  in Juniata Valley Financial on September 3, 2024 and sell it today you would earn a total of  57.00  from holding Juniata Valley Financial or generate 4.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Juniata Valley Financial  vs.  Mach Natural Resources

Juniata Valley Financial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Juniata Valley is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Mach Natural Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mach Natural Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Juniata Valley and Mach Natural

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

The idea behind Juniata Valley Financial and Mach Natural Resources 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.