Correlation Between Juniata Valley and 594918BL7

Can any of the company-specific risk be diversified away by investing in both Juniata Valley and 594918BL7 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 594918BL7 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 MICROSOFT P 445, you can compare the effects of market volatilities on Juniata Valley and 594918BL7 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 594918BL7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniata Valley and 594918BL7.

Diversification Opportunities for Juniata Valley and 594918BL7

0.38

Correlation Coefficient

Juniata Valley  594918BL7

Weak diversification

The 3 months correlation between Juniata and 594918BL7 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and MICROSOFT P 445 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICROSOFT P 445 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 594918BL7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICROSOFT P 445 has no effect on the direction of Juniata Valley i.e., Juniata Valley and 594918BL7 go up and down completely randomly.

Pair Corralation between Juniata Valley and 594918BL7

Given the investment horizon of 90 days Juniata Valley Financial is expected to generate 2.75 times more return on investment than 594918BL7. However, Juniata Valley is 2.75 times more volatile than MICROSOFT P 445. It trades about 0.06 of its potential returns per unit of risk. MICROSOFT P 445 is currently generating about 0.02 per unit of risk. If you would invest  1,226  in Juniata Valley Financial on November 19, 2024 and sell it today you would earn a total of  97.00  from holding Juniata Valley Financial or generate 7.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Juniata Valley Financial  vs.  MICROSOFT P 445

Juniata Valley Financial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 4 (%) 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 March 2025.

MICROSOFT P 445

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MICROSOFT P 445 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 594918BL7 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Juniata Valley and 594918BL7

The main advantage of trading using opposite Juniata Valley and 594918BL7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniata Valley position performs unexpectedly, 594918BL7 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 594918BL7 will offset losses from the drop in 594918BL7's long position.

The idea behind Juniata Valley Financial and MICROSOFT P 445 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.