Correlation Between Juniata Valley and Postal Realty

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

Diversification Opportunities for Juniata Valley and Postal Realty

-0.58

Correlation Coefficient

Juniata Valley  Postal Realty

Excellent diversification

The 3 months correlation between Juniata and Postal is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and Postal Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Realty Trust 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 Postal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Realty Trust has no effect on the direction of Juniata Valley i.e., Juniata Valley and Postal Realty go up and down completely randomly.

Pair Corralation between Juniata Valley and Postal Realty

Given the investment horizon of 90 days Juniata Valley Financial is expected to under-perform the Postal Realty. In addition to that, Juniata Valley is 1.38 times more volatile than Postal Realty Trust. It trades about -0.24 of its total potential returns per unit of risk. Postal Realty Trust is currently generating about -0.32 per unit of volatility. If you would invest  1,379  in Postal Realty Trust on October 9, 2024 and sell it today you would lose (104.00) from holding Postal Realty Trust or give up 7.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Juniata Valley Financial  vs.  Postal Realty Trust

Juniata Valley Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Juniata Valley reported solid returns over the last few months and may actually be approaching a breakup point.

Postal Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Postal Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Juniata Valley and Postal Realty

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

The idea behind Juniata Valley Financial and Postal Realty Trust 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..